The following partially completed process cost summary describes the July produc

Question

The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion Direct Conversion Equivalent Units of Production Materials Units transferred out Units of ending work in process Equivalent units of production 44,000 EUP 44,000 EUP 4,000 EUP2,400 EUP 48,000 EUP 46,400 EUP Direct Costs per EUP Costs of beginning work in process Costs incurred this period Total costs Materials Conversion $ 40,35e $5,250 342,750 614,400 348,000 574,050 Units in beginning work in process (al1 completed during July) Units started this period Units completed and transferred out Units in ending work in process 3,500 44,500 44,000 4,000

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 3,500 Add: Units Started in Process 44,500 Total Units to account for: 48,000 UNITS TO BE ACCOUNTED FOR: Units started and completed 44,000 Ending Work in Process 4,000 Total Units to be accounted for: 48,000 Equivalent Units: UNITS Material Cost Conversion % Completion Units % Completion Units Units started and completed 44000 100% 44,000 100% 44,000 Ending Work in Process 4000 100% 4,000 60% 2,400 Total Equivalent units 48000 162,000 46,400 TOTAL COST TO ACCOUNT FOR: Material Conversion Beginning work in Process 40,350 5,250 Cost Added during May 574,050 342,750 Total Cost to account for: 614,400 348,000 Equivalent Units 162,000 46,400 Cost per Equivalent unit 3.79 7.5 TOTAL COST ACCOUNTED FOR: Units Completed and Transferred out (44000 units) Equivalent unit Cost per EU Total Cost Material 44,000 3.79 166760 Conversion Cost 44,000 7.5 330000 Total Cost of Units completed and transferred out: 496760 Ending Work in process (4000 units) Equivalent unit Cost per EU Total Cost Material 4,000 3.79 15160 Conversison Cost 2,400 7.5 18000 Total cost of Ending Work in process: 33,160

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