Change in Unit Cost from Prior Department and Valuation of Inventory Petrini Pro

Question

Change in Unit Cost from Prior Department and Valuation of Inventory Petrini Products Co. has two departments: Mixing and Cooking. At the beginning of the month, Cooking had 4,000 units in process with costs of $8,600 from Mixing, and its own departmental costs of $500 for materials, $1,000 for labor and $2.500 for factory overhead. During the month, 10,000 units were received from Mixing with a cost of $25,000. Cooking incurred costs of $4,250 for materials, S8,500 for labor, and $21,250 for factory overhead, and finished 12,000 units. At the end of the month, there were 2 s, one-half comp Required (Round unit costs to three decimal places and use the rounded value in subsequent calculations.) 1. Determine the unit cost for the month in Cooking. per unit 2. Determine the adjusted weighted average unit cost for al units received from Mixing per unit 3. Determine the unit cost of goods finished. per unit 4. Determine the accumulated cost of the goods finished and of the ending work in process. Accumulated cost of the goods finished is Accumulated cost of the ending work in process is

Explanation / Answer

Answer 1 Calculation of of unit cost for the month in cooking Calculation of equivalent units Physical Units % Complete with respect to total Cost incurred in Cooking during the month Equivalent Units Finished Units 12000 100% 12000 Ending work in process units 2000 50% 1000 Total Equivalent Units 13000 Unit cost for the month in Cooking = Total cost incurred for the month in Cooking / Total Equivalent units Unit cost for the month in Cooking = ($4250+$8500+$21250) / 13000 units = $2.615 Answer 2 Calculation of adjusted weighted average unit cost for all units received from Mixing Cost of beginning Work in process $12,600 Add : Cost of units transferred from Mixing $25,000 Total cost all units received from Mixing $37,600 / Total Equivalent units 13000 Adjusted weighted average unit cost $2.892 Answer 3 Unit cost of goods finished = Unit cost for the month in cooking + adjusted weighted average unit cost for all units received from Mixing Unit cost of goods finished = $2.615 + $2.892 = $5.507 Answer 4 Accumulated cost of the goods finished is = 12000 units * $5.507 = $66,092 Accumulated cost of the ending work in process is = 1000 units * $5.507 = $5,508

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