The following information is available from the Oils Division of Glasgow Corporation for December. Conversion costs for this division were 80 percent complete as to beginning work-in-process inventory and 50 percent complete as to ending work-in-process inventory. Information about conversion costs follows.
|WIP at December 1 (80% complete)||102,000||$||395,760|
|Units started and costs incurred during December||542,000||2,229,070|
|Units completed and transferred to next department during December||402,000||?|
The Oils Division uses FIFO.
a-1. Compute the equivalent units for conversion costs.
a-2. Compute the cost per equivalent unit for conversion costs.
a-3. What was the conversion cost of work-in-process inventory in the Oils Division at December 31?
b. What were the conversion costs per
equivalent unit produced last period and this period,
|working||Physical units||Equivalent units|
|WIP at December 1 (80% complete)||1,02,000||20400||(102000*20%)|
|Units started and completed during December (402000-102000)||3,00,000||3,00,000|
|Units completed and transferred to next department during December||4,02,000|
|Unist in ending Invetory (542000-300000)||2,42,000||121000||(242000*50% completed)|
|Total equivalent units||4,41,400|
|a-1 the equivalent units for conversion costs.||4,41,400|
|a-2 the cost per equivalent unit for conversion costs. (2229070/441400)||$5.05|
|a-3. conversion cost of work-in-process inventory in the Oils Division at December 31||$6,11,050|
|ans 4||This period||Last period|
|conversion costs per equivalent unit||$5.05||4.85|
|The cost increased|
|If any doubt please comment|
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