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 2,050(MATERIAL). 970(CONVERSION)

Cost per equivalent unit$15.16(MATERIAL) $5.53(CONVERSION)

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

Solution:

Computation of Cost of ending WIP and units completed & transferred out - Prep Department
Particulars	Material	Conversion	Total
Equivalent unit of Ending WIP	2050	970
Cost per equivalent unit	$15.16	$5.53
Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)	$31,078	$5,364	$36,442
Units completed and transferred	20500	20500
Cost of units completed & Transferred (Unit completed * cost per equivalent unit)	$310,780	$113,365	$424,145