Question

The Dudes Diaper Company uses a process costing system to account for the cost of manufacturing...

The Dudes Diaper Company uses a process costing system to account for the cost of manufacturing cloth diapers. The diapers go through two departments, Cutting and Assembly. Assembly started the month with 8,000 diapers in beginning Work in Process Inventory that were 70 percent complete with respect to conversion costs. An additional 40,000 diapers were transferred from Cutting to Assembly. At the end of the month there were 6,000 diapers in the ending Work in Process Inventory of the Assembly Department that were 75 percent with respect to conversion costs.

1. How many diapers were transferred to finished goods during the month?

2. What were the equivalent units of production for conversion costs in the Assembly Department for the month?

Homework Answers

Answer #1

1.

Assembly Department Physical Units
Beginning WIP 8000
Transferred in from Cutting department 40000
Total units to account for 48000
Transferred out to Finished Goods (48000 - 6000) 42000
Ending WIP 6000
Total units accounted for 48000

Diapers transferred to finished goods during the month: 42,000

2.

Assembly Department Physical Units %
Conversion
EUP-Conversion
Units to complete in beginning goods in process [8000 x (100% - 70%)] 8000 30% 2400
Units started and completed this period (42000 - 8000) 34000 100% 34000
Total units completed and transferred 42000 36400
Units of ending goods in process (75% x 6000) 6000 75% 4500
Equivalent units of production 40900

Equivalent units of production for conversion costs in the Assembly Department for the month: 40,900

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