Regal Polish manufactures a single product in one department and uses a process

Question

Regal Polish manufactures a single product in one department and uses a process costing system. At the start of May, there were 10,600 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 106,200 units. Ending Work in Process inventory consisted of 5,030 units that were 100 percent complete with respect to material and 70 percent complete with respect to conversion costs.

a) Calculate the cost per equivalent unit for each of the three cost itmes and in total.

Material, Labor, Overhead, 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.

Cost Information Beginning Work in Process Costs Added in May Direct material $3,830 $79,800 Direct labor 120 8,660 Manufacturing overhead 280 9,600 Total $4,230 $98,060

Explanation / Answer

Cost of Prduction report USD$ Equivalent Units Flow Of Units Physical Units Direct Material Direct Labour Overhead cost Units to be accounted for Beginning work in process inventory 10600 Units started this period 106200 Total u nits to be accounted for 116800 Units accounnted for: Completed and transferred out (b) 111770 111770 111770 111770 Ending work in progress inventory© 5030 5030 3521 3521 Total units to be accounted for (f) 116800 116800 115291 115291 Flow of Cost Cost in the begnning work in progress inventory 4230 3830 120 280 Cost added in current period 98060 79800 8660 9600 Total Cost to be accounted for (e)    Ans C 102290 83630 8780 9880 Cost per equivalent unit (a)    (e/f) Ans A 0.80 0.72 0.08 0.09 Cost accounted for Cost assigned to units transferred out (a*b) Ans B 98119 80028.47 8511.86 9578.26 Cost in ending work in progress inventory (a*c) Ans B 4171 3601.53 268.14 301.74 Total Cost accounted for   Ans C 102290.00 83630.00 8780.00 9880.00

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