Question 6 (15 points) Alpha Company had the following information for FY 2017:

Question

Question 6 (15 points) Alpha Company had the following information for FY 2017: Work in Process 1/1/17 100,000 units Units Started into Production 575,000 units Work in Process - 12/31/17 75,000 units Direct Material put Into Production $575,000 Conversions Costs put into Production $843,750 The beginning work in process was 100% complete as to direct materials and 75% complete as to conversion costs. The ending work in process was 100% complete as to direct materials and 50% complete as to conversion costs. The beginning work in process consisted of: Direct Material $100,000 Conversion Costs $112.500

Explanation / Answer

Weighted average cost Beggining units 100000 Transferred out 6,00,000 Started intro production 575000 Ending units 75,000 Units accounted for 675000 675000 Equivalent units Material Conversion cost Units transferred                      A 600000 600000 Ending Units 75,000 75,000 Completion 100% 50% B 75000 37500 Total units 675000 637500 Cost per equivalent units Particulars Material Conversion cost total As at beginning 100000 112500 212500 Added during the month 575000 843750 1418750 Cost to be accounted for 675000 956250 1631250 Total eqivalent units 675000 637500 Cost per equivalent unit 1.00 1.50 2.50 Cost per equivalent unit = Cost to be accounted for / Total equivalent units Cost of ending work in progress Conversion cost Particulars Material Total Ending units 75,000 75,000 Cost per equivalent units 1.00 1.50 Completion 100% 50% Total cost 75000 56250 131250 Cost of goods transferred Conversion cost Particulars Material Total Number of units 600000 600000 Cost per equivalent units 1.00 1.50 2.50 Total amount 600000 900000 1500000

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