Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,500 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $705,612 in total. The ending work in process inventory in January consisted of 3,400 units, which were 60% complete with respect to materials and 40% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead Cost per equivalent unit $ 13.40 $ 4.60 $ 7.00 Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January. 3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January. 4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month

Equivalent unit of material = 26500+(3400*60%) = 28540 unit

Equivalent unit of labour = 26500+(3400*40%) = 27860 unit

Equivalent unit of overhead = 26500+(3400*40%) = 27860 unit

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January

Ending work in process = (2040*13.40+1360*4.6+1360*7) = 43112

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January

Cost of unit transferred out = (13.40+4.6+7)*26500 = 662500

4. Prepare a cost reconciliation for January.

Total cost to be accounted for	705612
Cost accounted for
Cost of units transferred out	662500
Cost of ending work in process	43112
Total cost accounted for	705612