Question

Data concerning a recent period’s activity in the Prep Department, the first processing department in a company that uses process costing, appear below: Materials Conversion Equivalent units in ending work in process inventory 2,080 810 Cost per equivalent unit $ 13.86 $ 6.13 A total of 20,500 units were completed and transferred to the next processing department during the period. Required: 1. Compute the cost of ending work in process inventory for materials, conversion, and in total. 2. Compute the cost of the units completed and transferred out for materials, conversion, and in total.

Answer 1

1&2.The following are the required calculations:

	materials	connversion	total
cost of ending work in process inventory	($13.86*2,080)=>$28,828.80	($6.13*810)=>$4,965.3	$33,794
cost of units transferred out	($13.86*20,500)=>$284,130	($6.13*20,500)=>$125,665	$409,795

note: work in process inventory = equivalent units in ending work in process inventory * cost per equivalent unit.

cost of units transferred out = units transferred out * cost per equivalent unit.