The Welding Department of Thorpe Manufacturing Company has the following product

Question

The Welding Department of Thorpe Manufacturing Company has the following production and manufacturing cost data for February 2012. All materials are added at the beginning of the process and conversion costs are added evenly throughout the process. Ending Work in Process is 20% complete

Manufacturing Cost

Materials 180,000

Labor 52,380

Overhead 61,445

Production Data

Beginning WIP 0

Units Completed 45,000

Units Started 49,000

Ending WIP ?

Requirements

1. Calculate the Equivalent Units for Direct Materials and Conversion Cost

2. Calculate the cost per unit for Direct Material and Conversion Costs

3. Calculate the Total cost Transferred out and the costs of the ending Work in Process

Explanation / Answer

Ending WIP=49000-45000=4000

1.

Equivalent unit

2. Cost per unit

3. Total cost transferred out =45000*6.16=277200

Cost of ending work in process:

Direct material conversion cost Units completed 45000 45000 Ending WIP 4000(100%) 800(20%) Equivalent units 49000 45800

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