At Opal Incorporated, direct materials are added at the beginning of the process

Question

At Opal Incorporated, direct materials are added at the beginning of the process and conversions costs are uniformly applied. Other details include: wir beginning (70% for conversion) Units started Units completed and transferred out WIP ending (50% for conversion) Beginning WIP direct materials Beginning WIP conversion costs Costs of materials added Costs of conversion added 20,200 units 154,000 units 120,000 units 54,200 units $48,500 $26,200 $441,100 $263,000 Required a. b. c. d. e. f. What are the total equivalent units for direct materials? What are the total equivalent units for conversion costs? What is the cost per equivalent unit for direct materials? What is the cost per equivalent unit for conversion costs? What is the total cost of units completed and transferred out? What is the total cost of units remaining in ending WIP?

Explanation / Answer

a) Equivalent unit of material = 120000+54200 = 174200 Units

b) Equivalent unit of conversion = 120000+(54200*50%) = 147100 Units

c) Cost per equivalent unit of material = (48500+441100)/174200 = 2.81056 per unit

d) Cost per equivalent unit of conversion = (26200+263000)/147100 = 1.96601 per unit

e) Total cost of units completed and transferred out = (2.81056+1.96601)*120000 = 573188

f) Total cost of ending work in process = (54200*2.81056+27100+1.96601) = 205612

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