At the start of November, Penco Refinery had Work in Process inventory consistin

Question

At the start of November, Penco Refinery had Work in Process inventory consisting of 4,700 units that were 80 percent complete with respect to materials and 60 percent complete with respect to conversion costs. The cost of the units was $39,200 ($25,900 of material cost and $13,300 of labor and overhead). During November, the company started 39,100 units and incurred $420,200 of material cost and $399,000 of labor and overhead. The company completed 40,800 units during the month, and 3,000 units were in process at the end of November. The units in ending Work in Process were 80 percent complete with respect to materials and 50 percent complete with respect to conversion costs.

a. Calculate the cost per equivalent unit for materials and conversion costs.(Round answers to 2 decimal places, e.g. 15.25.)

b. Calculate the cost of items completed during November. (Round answer to 0 decimal places, e.g. 125.)

c. Calculate the cost of ending Work in Process. (Round answer to 0 decimal places, e.g. 125.)

Explanation / Answer

Answer a. Calculation of equivalent Units Particulars Units Eq. Units Material Labor & Overhead WIP In the beginning in units 4700 Started in Processing in Units 39100 43800 Completed during the Month 40800 40800 40800 WIP In the end 3000 2400 1500 43800 43200 42300 Calculation of Costs per Equivalent Unit Material Labor & Overhead Total WIP In the Beginning          25,900              13,300               39,200 Cost Incurred during May        420,200            399,000             819,200 Total Costs        446,100            412,300             858,400 Equivalent Units in Gallons 43200 42300 Cost per Equivalent Unit             10.33                   9.75 Answer b. Calculation of Total Cost of Completed Units Material Labor & Overhead Total No. Of Unit Completed 40800 40800 40800 Cost per Equivalent Unit             10.33                   9.75 Total Cost        421,317            397,679             818,996 Answer b. Calculation of Total Cost of Ending WIP Material Labor & Overhead Total Equivalent No. Of Unit 2400 1500 40800 Cost per Equivalent Unit             10.33                   9.75 Total Cost          24,783              14,621               39,404

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