Regal Polish manufactures a single product in one department and uses a process
ID: 2420397 • 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 10,800 units in process that were 100 percent complete with respect to direct material and 70 percent complete with respect to conversion costs (labor and overhead). During the month, the company began production of 108,800 units. Ending Work in Process inventory consisted of 5,040 units that were 100 percent complete with respect to material and 70 percent complete with respect to conversion costs
Question 1. Calculate the cost per equivalent unit for each of the three cost items and in total.
Material:
labor:
Overhead:
Total:
question 2
Calculate the cost of items completed in May and the cost of ending Work in Process
cost of items completed in may:
cost of ending WIP:
question 3
Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in May
Beginning WIP:
Cost added:
total:
cost of items completed:
cost of ending WIP:
total:
cost info beginning WIP Costs added in may Direct Material $3,820 $71500 Direct Labor 130 8030 maufacturing Overhead 380 9400 total $4330 88930Explanation / Answer
Answer:1
The company started the month with 10,800 units and 108,800 units were entered into production. Thus, the company must account for 119,600 units. At the end of the month, the company had 5,040 units in ending work in process. This implies that 114,560 units were completed
(119,600 - 5,040).
The denominators for the calculations of cost per equivalent are:
Units Equivalent Units
Completed in Ending WIP Total
Material 114,560 5,040 119,600
Labor 114,560 3,528 118,088
Overhead 114,560 3,528 118,088
Beginning WIP Cost Added Total Denominator Cost per EU
Material $3,820 $71,500 $75,320 119,600 $0.63
Labor 130 8,030 8,160 118,088 0.069
Overhead 380 9,400 9,780 118,088 0.083
Total $4,330 $88,930 $93,260 $0.782
2. Cost of items completed in May is $89,585.92:
114,560 units ´ $0.782 = $89,585.92
Cost of items in ending work in process:
Material (5,040 equivalent units ´ $0.63) $3,175.2
Labor (3,528 equivalent units ´ $0.069) 243.432
Overhead (3,528 equivalent units ´ $0.083) 292.824
Total $3,711.456
Answer:3
Beginning work in process $ 4,330
Cost added 88930
Total $93260
Cost of items completed $89585.92
Cost of ending WIP 3711.456
Total $93260
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