Question

On April 1 WIP BB is 30 units, 170 units were started in April. WIP Balance on April 30^th was 100 units. Direct Material Cost for the month was $1,500.00 and Conversion Cost (Labor/OVHD) was $11,000 (WIP had a $0 BB for both Direct Material and Conversion Cost). Direct Material was 50% complete and Conversion was 10% complete.

Using your Process Costing Equivalent Unit Calculations the amount of WIP transferred to Department B would be?

		$14,000
		$50,000
		$71,000
		$11,000

Answer 1

Answer:$11,000

Calculations:

Under weighted average,

Equivalent units
	Direct materials	Conversion cost
Units transferred out [30+170-100]	100	100
Ending work in process
Materials [100 units x 50%]	50
Conversion costs [100 units x 10%]		10
Total equivalent units	150	110
Cost per equivalent unit
Total costs	$1,500	$11,000
÷ Total equivalent units	150	110
= Cost per equivalent unit	$10	$100
Amount of WIP transferred to Department B
	Direct materials	Conversion cost	Total
Equivalent Units transferred out	100	100
x Cost per equivalent unit	$10	$100
= Total cost	$1,000	$10,000	$11,000