Question

Exercise 16-3 The ledger of American Company has the following work in process account.

Work in Process—Painting

5/1 Balance 3,890 5/31 Transferred out ?

5/31 Materials 6,940

5/31 Labor 3,530

5/31 Overhead 1,880

5/31 Balance ?

Production records show that there were 580 units in the beginning inventory, 30% complete, 1,780 units started, and 1,570 units transferred out. The beginning work in process had materials cost of $2,640 and conversion costs of $1,250. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

What is the unit conversion cost for May? (Round unit cost to 3 decimal places, e.g. 2.257.)

What is the total cost of units transferred out in May? (Round answer to 0 decimal places, e.g. 1,225.)

What is the cost of the May 31 inventory? (Round answer to 0 decimal places, e.g. 1,225.)

Thank you !

Answer 1

1
Work in process, May 1	580
Started into production	1,780
Total units to be accounted for	2,360
Less: Transferred out	1,570
Work in process, May 31	790 units
	Equivalent Units
	Materials	Conversion Cost
Units transferred out	1,570	1,570
Work in process, May 31	790	316
790*100%,790*40%
	2,360	1,886
	Materials	Conversion Cost
Work in process, May 1	2640	1250
Costs Added	6940	5410
Total Material Cost	9580	6660
Equivalent units	2,360	1,886
Unit costs	4.059	3.531
b
Transferred out 1570*(4.059+3.531)	11917
cost of the May 31 inventory
Work in process
Materials 790*4.059	3207
Conversion costs 316*3.531	1116
	4323