Question

All materials are entered at the beginning of each process.

Labor and manufacturing overhead are incurred uniformly throughout each process.

Production and cost data for the Assembly Department during July 2020 are presented below.

Production Data		July
Beginning work in process inventory, 7/1 (40% complete)		25,000	units
Units completed and transferred out		70,000	units
Ending work in process inventory, 7/31 (30% complete)		30,000	units
Cost Data		Materials	Conversion Costs
Beginning work in process inventory, 7/1		$80,000	$12,000
Costs incurred during production in July		$190,000	$106,500
Total		$270,000	$118,500

1. How many physical units have to be accounted for in July? (2) 2. How many physical units are transferred in to the Assembly Department? (3 points) 3. What are the equivalent units of production for materials, for conversion costs and for the total manufacturing costs for the month of July? (9 points) 4. Compute the unit costs of production for materials, for conversion costs and for the total manufacturing costs for the month of July (6 points) 5. What is the total cost assigned to the 70,000 units that were transferred out of the process in July? (3 points) 6. What is the total cost of the J

Answer 1

1.

Units from beginning work in process =25,000

Units started into production =75,000

Total units to be accounted for =100,000

2. Transferred to Assembly department=70,000 units

3. Equivalent units of production

	Materials	Conversion
Units Completed and transferred out	70,000	70,000
Units in Ending Work-in-process	30,000	9,000
Equivalent Units of production	100,000	79,000

4. Cost per unit

	Materials	Conversion
Beginning Work-in-process	$80,000	$12,000
Costs incurred this period	$190,000	$106,500
Total costs	$270,000	$118,500
÷ Equivalent units	100,000	79,000
Cost per equivalent unit	$2.7	$1.5

5.

Cost of units transferred out = 70,000($2.7+$1.5) =$294,000

6. Cost of ending work in process

Materials (30,000×$2.7) =$81,000

Conversion (9,000×$1.5) =$13,500

Total cost of Ending Work-in-process =$94,500