Regal Polish manufactures a single product in one department and uses a process
ID: 2420063 • Letter: R
Question
Regal Polish manufactures a single product in one department and uses a process costing system. At the start of May, there were 10,900 units in process that were 100 percent complete with respect to direct material and 60 percent complete with respect to conversion costs (labor and overhead). During the month, the company began production of 106,600 units. Ending Work in Process inventory consisted of 5,080 units that were 100 percent complete with respect to material and 60 percent complete with respect to conversion costs.
$91,800
a) Calculate the cost per equivalent unit for each of the three cost items and in total
b)Calculate the cost of items completed in May and the cost of ending Work in Process
c)Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in May
please explain in detail
Cost Information Beginning Work in Process Costs Added in May Direct material $3,860 $73,800 Direct labor 290 8,900 Manufacturing overhead 330 9,100 Total $4,480$91,800
a) Calculate the cost per equivalent unit for each of the three cost items and in total
b)Calculate the cost of items completed in May and the cost of ending Work in Process
c)Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in May
please explain in detail
Explanation / Answer
Answer a. Calculation of Equivalent Units Direct Material Direct Labor / Manufacturing Overhead % Completed Equivalent Units % Completed Equivalent Units WIP in the beginning 10900 Units started Out 95700 Total units 106600 Finished Goods 101520 100 101520 100 101520 WIP In the end 5080 100 5080 60 3048 Total units 106600 106600 104568 Calculation of Cost per unit Direct Material Direct labour Manufacturing Overhead Total WIP in the Beginning 3,860 290 330 4,480 Cost Incurred in May 73,800 8,900 9,100 91,800 Total Cost 77,660 9,190 9,430 96,280 Equivalent Units 106,600 104,568 104,568 Cost per Unit 0.73 0.09 0.09 0.91 Answer b. Calculation of Cost Direct Material Direct labour Manufacturing Overhead Total Units Completed 73,959 8,922 9,155 92,036 (101520 Units) WIP in the end 3,701 268 275 4,244 Total Cost 77,660 9,190 9,430 96,280 Answer c. Reconcilation Statement Direct Material Direct Labour Manufacturing Overhead Total WIP in the beginning 3,860 290 330 4,480 Cost Incurred 73,800 8,900 9,100 91,800 Total 77,660 9,190 9,430 96,280 Units Completed 73,959 8,922 9,155 92,036 WIP in the end 3,701 268 275 4,244 Total 77,660 9,190 9,430 96,280
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