Chapter 20: PE 20-6A cost of units transferred out and ending work in process Th
ID: 2511252 • Letter: C
Question
Chapter 20: PE 20-6A
cost of units transferred out and ending work in process
The costs per equivalent unit of direct materials and conversion in the filling department of Lilac Skin Care Company are $ 0.45 and $0.15, respectively. The equivalent units to be assigned costs are as follows:
Equivalent Units
Direct Materials Conversion
Inventory in process beginning of period 0 1,200
Started and completed during the period 38,000 38,800
Transferred out of filling(completed) 38,800 40,000
Inventory in the process, end of period 6200 2480
total units to be assigned costs 45,000 42480
The beginning work in process inventory had a cost $25,000. Determine the cost of completed and transferred out production and the ending work in process inventory.
Explanation / Answer
Solution:
Cost of units transferred out:
Equivalent Units
Cost per Eq. Unit
Total Cost
Partially completed beginning work in process
Direct materials
0
$0.45
$0
Conversion
1,200
$0.15
$180
Cost incurred during the period to complete the partially completed units from beg wip
$180
Plus: Beginning work in process inventory cost
$25,000
Total Cost of Partial Completed Beginning work in process (A)
$25,180
Started and Completed Units
Direct materials
38,800
$0.45
$17,460
Conversion
38,800
$0.15
$5,820
Total Cost of Units Started and Completed during the period (B)
$23,280
Total Cost of Completed and transferred out production Units (A+B)
$48,460
Total Cost of Completed and transferred out production Units = $48,460
Cost of Ending Work In Process
Equivalent Units
Cost per Eq. Unit
Total Cost
Cost of Ending Work In Process Inventory:
Direct Materials
6200
$0.45
$2,790
Conversion
2480
$0.15
$372
Total Cost assigned to Ending work in process inventory
$3,162
Total Cost assigned to Ending work in process inventory= $3,162
Cost of units transferred out:
Equivalent Units
Cost per Eq. Unit
Total Cost
Partially completed beginning work in process
Direct materials
0
$0.45
$0
Conversion
1,200
$0.15
$180
Cost incurred during the period to complete the partially completed units from beg wip
$180
Plus: Beginning work in process inventory cost
$25,000
Total Cost of Partial Completed Beginning work in process (A)
$25,180
Started and Completed Units
Direct materials
38,800
$0.45
$17,460
Conversion
38,800
$0.15
$5,820
Total Cost of Units Started and Completed during the period (B)
$23,280
Total Cost of Completed and transferred out production Units (A+B)
$48,460
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