E 21-11 The polishing department of Estaban Manufacturing company hasthe followi
ID: 2446520 • Letter: E
Question
E 21-11
The polishing department of Estaban Manufacturing company hasthe following production and manufacturing cost data for September.Materials are entered at the beginning of the process.
Production: Beginning inventory 1,600 units that are 100%complete as to materials and 30% complete as to conversion costs:Units started during the period are 18,400; ending inventory of5,000 units 10% as to conversion costs.
Manufacturing costs: beginning inventory costs comprised of$20,000 0f materials and $43,180 of conversion costs; materialcosts added in polishing during the month, $ 177,200; labor andoverhead applied in polishing during the month, $102,680 and$257,140 respectively.
Instructions:
Explanation / Answer
B.Inventory 1,600 Started 18,400 Total 20,000 Equivalent units DM CC B.inventory 1,600 - 1,120 70% Started&completed13,400 13,400 100% 13,400 100% E.Inventory 5,000 5,000 100% 500 10% Total 20,000 18,400 15,020 Costs 63,180 = 20,0000 + 43,180 537,020 = 177,200 + 359,820 (102,680+257,140) 600,200 Unit cost = 177,200 359,820 18,400 15,020 = $ 9.63 $ 23.96 Costs to units transferred out = total costs - Ending inventorycosts =600,200 -60,130 =$ 540,070 Ending inventory costs = (5000* 9.63) +(5000*23.96) = 60,130
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