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 2,010 800 Cost per equivalent unit $ 15.56 $ 4.63 A total of 21,100 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. (Round your final answers to the nearest whole dollar amount.

Answer 1

Solution:

		Materials	Conversion	Total
1.	Cost of ending work in process inventory	$31,276	$3,704	$34,980
	(Equivalent units in ending work in process inventory × cost per equivalent unit)	(2,010 units × $15.56 = $31,275.60 or $31,276)	(800 × $4.63 =$3,704)
2.	Cost of units transferred out	$328,316	$97,693	$426,009
	(Units transferred out × Cost per equivalent unit)	(21,100 units × $15.56 = $328,316)	(21,100 units × $4.63 = $97,693)

* If you have any query regarding this question please ask me.