Exercise 16-3 Work in Process—Painting Warning Don\'t show me this message again
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Exercise 16-3
Work in Process—Painting
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Exercise 16-3
The ledger of American Company has the following work in process account.Work in Process—Painting
5/1 Balance 3,890 5/31 Transferred out ? 5/31 Materials 6,590 5/31 Labor 3,230 5/31 Overhead 1,380 5/31 Balance ?Production records show that there were 460 units in the beginning inventory, 30% complete, 1,690 units started, and 1,400 units transferred out. The beginning work in process had materials cost of $2,940 and conversion costs of $950. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.
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1) Work in process, May 31 750 Units Working: Work in process, May 1 460 Add:Units started during may 1,690 Total 2,150 Less:Units completed and transferred out 1,400 Work in process, May 31 750 2) Unit Material cost for May $ 4.433 Working: a. Equivalent unit for Materials = Units completed + Ending Units*Percentage of completion = 1400+(750*100%) = 2150 Materials are added at the beginning of period.So, it is 100% completed. b. Materials Begininig work in process $ 2,940 Costs incurrred during may $ 6,590 Total Costs $ 9,530 Materials c. Total Costs $ 9,530 / Equivalent units of production 2150 Unit Cost $ 4.433 3) Unit conversion cost for May $ 3.271 Working: a. Equivalent unit for Conversion = Units completed + Ending Units*Percentage of completion = 1400+(750*40%) = 1700 b. conversion Begininig work in process $ 950 Costs incurrred during may $ 4,610 Total Costs $ 5,560 conversion c. Total Costs $ 5,560 / Equivalent units of production 1700 Unit Cost $ 3.271 4) Total cost of unit transferred out in May $ 10,784.40 Working: Equivalent units of production Cost per Equivalent unit of Production Total Costs Materials 1400 $ 4.433 $ 6,205.58 Conversion 1400 $ 3.271 $ 4,578.82 Total $ 10,784.40 5) Total cost of May 31 inventory $ 4,305.60 Working: Equivalent units of production Cost per Equivalent unit of Production Total Costs Materials 750 $ 4.433 $ 3,324.42 Conversion 300 $ 3.271 $ 981.18 Total $ 4,305.60
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