Question

Data concerning a recent period’s activity in the Prep Department, the first processing department in a company that uses process costing, appear below:

	Materials			Conversion
Equivalent units in ending work in process inventory		2,090			830
Cost per equivalent unit	$	15.76		$	5.43

A total of 21,700 units were completed and transferred to the next processing department during the period.

Required:

1. Compute the cost of ending work in process inventory for materials, conversion, and in total.

2. Compute the cost of the units completed and transferred out for materials, conversion, and in total.

Answer 1

1. Cost of ending work in process inventory:

Materials = $15.76 x 2,090 = $32,938.40

Conversion = $5.43 x 830 = $4,506.90

Total cost of work in process inventory = $37,445.30 ($32,938.40+$4,506.90)

2. Cost of the units completed and transferred out:

Total number of units which are completed and transferred = 21,700 units.

Material cost = $15.76 x 21,700 = $341,992

Conversion cost = $5.43 x 21,700 = $117,831

Total cost of completed and transferred units = $459,823 ($341,992 + $117,831)

Hope this is helpful!!