Erin Company\'s inventory at December 1, and the costs charged to Work in Proces

Question

Erin Company's inventory at December 1, and the costs charged to Work in Process—Department B during December are as follows:

During December, all direct materials are transferred from Department A, the units in process at December 1 were completed, and of the 26,000 units entering the department, all were completed except 1,000 units which were 70% completed as to conversion costs. Inventories are costed by the first-in, first-out method.

Prepare a cost of production report for December.

Round your cost per equivalent unit amounts to two decimal places. Round all other amounts to the nearest dollar. If an amount value is zero enter "0" as answer.

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1,200 units, 40% completed $47,800 From Department A, 26,000 units 845,000 Direct labor 312,000 Factory overhead 176,770

Explanation / Answer

Erin Company Cost of Production Report--Department B For the Month Ended December 31 Equivalent units Whole Units Direct material Conversion Inventory in process, December 1 (40% completed) 1200 Received from Department A 26000 Total units accounted for by Dept. B 27200 Units to be assigned costs: Inventory in process, Dec 1 (40% completed) 1200*60%=720 1200 0 720 Started and completed in dec 25000 25000 25000 Transferred to finished goods in Dec 26200 25000 25720 Inventory in process, Dec 30 (70% completed) 1000 1000 700 Total units to be assigned costs 27200 26000 26420 Costs Direct material Conversion Total Costs Costs Units Costs Total costs for Dec in Dept. B 845000 488770 1333770 Total equivalent units 26000 26420 Cost per equivalent unit 32.5 18.50 Costs charged to production: Inventory in process, Dec1 47800 Costs incurred in Dec (845000+312000+176770) 1333770 Total costs accounted for byDepartment B 1381570 Costs allocated to completed and partially completed units: Inventory in process, Dec 1, bal. 47800 To complete inventory inprocess, Dec 1 0 13320 13320 Started and completed in April 812500 462500 1275000 Transferred to finishedgoods in Dec 1336120 Inventory in process, Dec 30 32500 12950 45450 Total costs assigned by Dept. B 1381570

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