The following information concerns production in the Forging Department for Sept
ID: 2418545 • Letter: T
Question
The following information concerns production in the Forging Department for September. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $96,760 of direct materials.
a. Cost of beginning work in process inventory completed in September.
8,200*50%= 4,100
75,000 units
75,000+4,100= 79,100
b. Cost of units transferred to the next department during September.
c. Cost of ending work in process inventory on September 30.
d. Costs per equivalent unit of direct materials and conversion included in the September 1 beginning work in process. If required, round your answers to two decimal places.
e. The September increase or decrease in costs per equivalent unit for direct materials and conversion from the previous month. If required, round your answers to two decimal places.
Date Item Debit Credit Balance Debit Credit Sept. 1 Bal., 8,200 units, 50% completed 110,290 30 Direct materials, 75,000 units 862,500 972,790 30 Direct labor 109,180 1,081,970 30 Factory overhead 150,784 ? 1,232,754 30 Goods finished, ? units ? 30 Bal., 6,600 units, 60% completed ?Explanation / Answer
FIFO Method
Beginning WIP 8,200 Goods finished 76,600
Started 75,000 Ending WIP 6,600
Units to be accounted 83,200 Units to be accounted for 83,200
Eqivalent units Material Converssion
Beginning WIP 8,200 - 4,100
trandferred 68,400 68,400 68,400
Ending WIP 6,600 6,600 3,960
Equivalent units 75,000 76,460
Calculation of cost per unit
Beginning WIP - $13,530
Direct materials 862,500 259,964
total cost 862,500 273,494
Cost per unit $11.50 $3.58
a) Cost of beginning work in progress $3.50 * 4,100 = $14,678
b) Transferred (68,400*11.50 + 68,400 *3.58) =$1,031,472
c) Ending WIP ) 6,600*11.50 + 3960*3.58 = $90,077
d) Direct materials cost per eqivalent unit $0
Conversion cost $.18
e)96,760/8200 = 11.80 13,530/4100 = 3.3
Increase in materials cost .30 $22,500
Conversion increase .28 $21,409
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