Production records show that there were 540 units in the beginning inventory, 30

Question

Production records show that there were 540 units in the beginning inventory, 30% complete, 1,420 units started, and 1,410 units transferred out. The beginning work in process had materials cost of $2,910 and conversion costs of $1,670. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

The ledger of Custer Company has the following work in process account. Work in Process-Painting 5/1 Balance 4,580 5/31 Transferred out ? 5/31 Materials 5,960 5/31 Labor 5/31 Overhead 2,180 5/31 Balance 3,510

Explanation / Answer

Solution: (a) How many units are in the process at May 31? Total 550 units are work in Process at May 31st Below is the calculation shown: Process Costing Particulars In units Work in Process, beginning inventory i.e., on May 1st 540 Started into Production 1,420 Total units to be accounted for = 540+1420units 1,960 Less : Transferred out 1,410 Work in Process, May 31st 550 units 540 beginning + 1420 started - 1410 transferred out = 550 units physically in process at May 31. (b) What is the unit materials cost for May ? Equivalent Units Materials Conversion Costs Units Transferred out 1410 1410 Work in Process, May 31st 550 - 100% (550*100%) = 550 550 550 - 40% (550*40%) = 220 220 Total units Materials = 1410 + 550 units =1960 units Total units Conversion Costs = 1410 + 220 = 1630 units 1960 1630 Materials Conversion Costs Work in Process, beginning inventory i.e., on May 1st $2,910 $1,670 Costs Added for Conversion Costs: Labour - 3,510 Overhead - 2,180 3,510+2,180 = 5,690 5,960                        5,690 Total material & conversion cost Materials - $2,910+5,960 = $8,870 Conversion costs - $1,670+5,690 = $7,360 $8,870 $7,360 Total of Material & conversion cost/Total of units accordingly $8870/1960 units $4.53 $4.52 Unit materials cost for May is $4.53 (c) What is the unit Conversion Cost for May? $7,360/1630 units $4.52 Unit Conversion Cost for May is $4.52

Related Questions

Navigate

• Browse (All)
• Browse P
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.