Calculation of Equivalent Units [LO 2] McMillian Tire Company produces tires use

Question

Calculation of Equivalent Units [LO 2] McMillian Tire Company produces tires used on small trailers.The month of June ended with 500 tires in process, 90 percent complete as to direct materials, and 50 percent complete as to conversion costs; 2,000 tires were transferred to finished goods during the month,and 2,400 were started during the month.The beginning Work in Process inventory was 60 percent complete as to direct materials and 40 percent complete as to onversion costs.


PROBLEM 3-1. Comprehensive Problem, One Department [LO 3, 4] Regal Polish manufactures a single product in one department and uses a process costing system. At the start of May, there were 10,000 units in process that were 100 percent complete with respect to direct material and 60 percent complete with respect to conversion costs (labor and overhead). During the month, the company began production of 105,000 units. Ending Work in Process Inventory consisted of 5,000 units that were 100 percent complete with respect to material and 70 percent complete with respect to conversion costs

Cost Information Beginning Work in Process Costs Added in May
Direct material $4,000 $76,500
Direct labor 200 8,880
Manufacturing overhead 300 9,915
Total $4,500 $95,295

Required
a. Calculate the cost per equivalent unit for each of the three cost items and in total.
b. Calculate the cost of items completed in May and the cost of ending Work in Process.
c. Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and
costs added in May.

PROBLEM 3-8. Production Cost Report,Missing Information [LO 2,3,4,5] Marion Chemicals
produces a chemical used as a base in paints.In the manufacturing process, all materials are added
at the start of the process,whereas labor and overhead are added evenly throughout production.
Required
Fill in the missing information in Marion’s Production Cost Report for the month of December.
Marion Chemicals
Production Cost Report
December 2011
Unit Reconciliation
Units in beginning WIP (100% material, 10% conversion costs) 8,000
Units started during December ?
Units to account for ?
Units completed ?
Units in ending WIP (100% material, 20% conversion costs) 4,000
Units accounted for ?
109
Cost per Equivalent Unit Calculation
Material Labor Overhead Total
Cost
Beginning WIP $45,200 $10,500 $26,300 $ 82,000
Cost incurred in December ? ? ? ?
Total ? ? ? ?
Units
Units completed ? ? ?
Equivalent units, ending WIP ? ? ?
Total ? ? ?
Cost per equivalent unit $1.70 $1.32 $2.64 ?
Cost Reconciliation
Total cost to account for $2,896,568
Cost of completed items $2,886,600
Cost of ending WIP
Material $?
Labor ?
Overhead ? ?
Total cost accounted for $2,896,568
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Explanation / Answer

Calculation of Equivalent Units [LO 2] McMillian Tire Company produces tires used on small trailers.The month of June ended with 500 tires in process, 90 percent complete as to direct materials, and 50 percent complete as to conversion costs; 2,000 tires were transferred to finished goods during the month,and 2,400 were started during the month.The beginning Work in Process inventory was 60 percent complete as to direct materials and 40 percent complete as to onversion costs.

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