QUESTION 1 Turkey Ltd produces packaged tennis balls. Turkey has two production

Question

QUESTION 1 Turkey Ltd produces packaged tennis balls. Turkey has two production departments: blending and packaging. In the blending department, materials are added at the beginning of the process. Conversion costs are added throughout the process for blending. Data for the month of November for the blending department are as follows: Blending Department Data for November: Units: Beginning work in process 0 units Started in production during November 232,000 units Completed and transferred out to Packaging in November 196,000 units Ending work in process inventory (70% completed) 36,000 units Costs: Beginning work in process $ 0 Costs added during November Direct materials 109,040 Conversion costs 64,148 Total costs added during November $ 173,188 Calculate and show all workings: (1) the cost of the units completed and transferred out to the packaging department (2) the total cost of the units in the blending department ending work in process inventory.

Explanation / Answer

Materials Coversion costs Units Completed and transferred out 196000 196000 Ending work in process 36000 25200 Equivalent units 232000 221200 Total costs 109040 64148 Cost per Equivalent unit 0.47 0.29 1 Cost of the units completed and transferred out = 196000*(0.47+0.29)= $148960 2 Cost of ending work in process inventory = (36000*0.47)+(25200*0.29)= $24228

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