Question

The AMZ company produces winter growing pots for garden centres. Materials and conversion costs in the XYZ Handling Department are applied at various rates in the manufacturing process.

For September 2020, the beginning work in process inventory in the XYZ Handling Department was 3,300 units that were 35% complete with respect to materials and 25% complete with respect to conversion costs. The ending work in process inventory was 6,800 units averaging 40% completion with respect to materials and 20% complete for conversion costs.

Production data shows that 95,000 units were started in production during the month. Beginning work in process inventory costs included $12,548 for materials and $10,440 for conversion costs. For the period, additional costs of $580,650 for materials and $852,600 for conversion costs were added.

Calculate the number of equivalent units of conversion costs for the period.

What are the total costs that must be accounted for?

What is the cost per equivalent unit for material? Please provide your answer to 3 decimal places.

Answer 1

FIFO METHOD REQUIREMENT 1 Calculation of Total Costs to Be Accounted For Costs to be Accounted For Work-In-Process March 1 12548 10440 22988 Started into Production 580650 852600 1433250 Total Costs 593198 863040 1456238 REQUIREMENT 2 Calculation of Cost Per Equivalent Unit Materials Conversion Costs Total Costs Unit Costs Cost Added 580650 852600 1433250 Equivalent Units* 93065 92035 Cost per Equivalant Unit 6.239 9.264 15.503 NOTE: IN FIFO Method only current period cost is divided by equivalent units to arrive at cost per equivalent unit. * Calculation of Equivalent Units Quantities Physical Units % Completed EQ. Units Materials % Completed EQ. Units Conversion Costs Units to be Accounted For: Work-In-Process - Beginning 3300 Started into Production 95000 Total Units to Account For 98300 Units Accounted For Completed & Transferred Out:      Work-In-Process - Beginning 3300 0.65 2145 0.75 2475      Started & Completed 88200 1.00 88200 1.00 88200 Work-In-Process - Ending 6800 0.40 2720 0.20 1360 Total Units 98300 93065 92035

WEIGHTED AVERAGE METHOD REQUIREMENT 1 Calculation of Total Costs to Be Accounted For Costs to be Accounted For Work-In-Process March 1 12548 10440 22988 Started into Production 580650 852600 1433250 Total Costs 593198 863040 1456238 REQUIREMENT 2 Calculation of Cost Per Equivalent Unit Materials Conversion Costs Total Costs Unit Costs Total Costs to be Accounted For 593198 863040 1456238 Equivalent Units* 94220 92860 Cost per Equivalant Unit 6.296 9.294 15.590 NOTE: In Wighted Avg. Method both current period cost as well as cost already incurred on beginning WIP is divided by equivalent units to arrive at cost per equivalent unit. * Calculation of Equivalent Units Quantities Physical Units % Completed EQ. Units Materials % Completed EQ. Units Conversion Costs Units to be Accounted For: Work-In-Process - Beginning 3300 Started into Production 95000 Total Units to Account For 98300 Units Accounted For Completed & Transferred Out 91500 1.00 91500 1.00 91500 Work-In-Process - Ending 6800 0.40 2720 0.20 1360 Total Units 98300 94220 92860