Hartwell Drug Company produces a supplement to improve bone density. Conversion

Question

Hartwell Drug Company produces a supplement to improve bone density. Conversion costs are added evenly throughout the production process. The following information is available for March:

Units:

Units (gallons) in process, March 1 (40% complete) 400

Units started in March 1,000

Units in process, March 31 (80% complete)   250

Costs:

Conversion costa in WIP, March 1

Labor $36,000

Overhead $6,000

Labor costs in March (5,100 hours) $102,780

Overhead in March $49.000

1. Compute the number of units completed in March

2. Compute the cost per equivalent unit for conversion costs.

3. Compute the conversion costs included in units completed in March

4. Compute the conversion costs included in units in process at the end of March.

(Answer each problem in detail with conclusion and results)

Explanation / Answer

units completed

Equivalent units

cost

Beginning WIP                                    $42,000

Added during the year                         151,780

total cost                                           $193,780

Cost per unit    193,780/1350       = $143.54 per unit

c)cost transferred 1150 * 143.54       = $165,072

d)Ending WIP         200 *143.54         =       28,708

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