Question

The Painting Department of Y Manufacturing Company has the following production and manufacturing cost data for October.

Production: Beginning inventory 8,000 units that are 100% complete as to materials and 40% complete as to conversion costs; units started into production 27,000; ending inventory of 12,000 units that are 20% complete as to conversion costs.

Manufacturing Costs: Beginning work in process inventory of $40,000, comprised of $30,000 of materials and $10,000 of conversion costs. Materials added during the month, $110,000; labor and overhead applied during the month, $62,000 and $55,000, respectively.

Instructions

1.

Compute the equivalent units of production for materials and conversion costs for the month of October.

	Physical units	Materials	Conversion cost
Transferred out
Work in process (October 31st)
Total

2.

Compute the unit costs for materials and conversion costs.

	Total	Per unit
Materials
Conversion cost
Total

3.

Determine the costs to be assigned to the units transferred out and ending work in process.

Cost to be accounted for		Total
Transferred out
Work in process
Materials
Conversion cost

Answer 1

Compute the equivalent units of production for materials and conversion costs for the month of October.

	Physical unit	%	EUP-Material	%	EUP-Conversion
Units transferred out	23000	100%	23000	100%	23000
Ending work in process	12000	100%	12000	20%	2400
Total	35000		35000		25400

Compute the unit costs for materials and conversion costs.

	Total	Per unit
Material	140000	4
Conversion	127000	5
Total	267000	9

3.Determine the costs to be assigned to the units transferred out and ending work in process.

Cost to be accounted for
Transferred out (23000*9)		207000
Ending work in process
Material (12000*4)	48000
Conversion cost (2400*5)	12000	60000
Total cost to be accounted for		267000