Question

The Polishing Department of Funtastic Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production: Beginning inventory 2,000 units that are 100% complete as to materials and 40% complete as to conversion costs; units started during the period are 48,000, ending inventory of 6,000 units 30% complete as to conversion costs.

Manufacturing costs: Beginning inventory costs, comprised of $18,000 of materials and $13,000 of conversion costs; materials costs added in Polishing during the month, $202,000 labor and overhead applied in Polishing department during the month $178,300 and $312,500 respectively.

Instructions:

(a) Compute the equivalent units of productions for materials and conversion costs for the month of September.

(b) Compute the unit costs for materials and conversion costs for the month.

(c) Determine the costs to be assigned to the units transferred out and in process.

Answer 1

Work in Process, Beginning	2000
Add: Units started during Month	48000
Less: Ending inventory	-6000
Units completed and transferred out	44000
a
	Materials	Conversion
Units completed and transferred out	44000	44000
Work in process, ending	6000	1800
Equivalent units of production	50000	45800
b
	Materials	Conversion
Work in process, beginning	18000	13000
Cost added during month	202000	490800
Total costs	220000	503800
Divide by Equivalent units of production	50000	45800
Cost per Equivalent unit	4.40	11.00
c
Transferred out	677600	=44000*(4.4+11)
Ending work in process	46200	=(6000*4.4)+(1800*11)