Question

Unit Cost and Cost Assignment, Nonuniform Inputs

Loran Inc. had the following equivalent units schedule and cost for its fabrication department during September:

	Materials		Conversion
Units completed	180,000		180,000
Add: Units in ending WIP x Fraction complete	85,000		56,100
(85,000 x 66%)
Equivalent units of output	265,000		236,100
Costs:
Work in process, September 1:
Materials	$147,000
Conversion costs	7,875
Total	$154,875
Current costs:
Materials	$1,198,000
Conversion costs	475,665
Total	$1,673,665

Required:

1. Calculate the unit cost for materials, for conversion, and in total for the fabrication department for September. If required, round your answers to the nearest cent.

Unit materials cost	$
Unit conversion cost	$
Total unit cost	$

2. Calculate the cost of units transferred out and the cost of EWIP. Round unit cost value to the nearest cent in intermediate calculations. If required, round final answers to the nearest dollar.

Cost transferred out	$
Cost of ending work in process	$

Answer 1

1
	Materials	Conversion costs
Work in process, September 1	147000	7875
Current costs	1198000	475665
Total costs	1345000	483540
Divide by Equivalent units of output	265000	236100
Units costs	5.08	2.05
Unit materials cost	5.08
Unit conversion cost	2.05
Total unit cost	7.13
2
Cost transferred out	1283400	=180000*7.13
Cost of ending work in process	546805	=(85000*5.08)+(56100*2.05)