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 | $ |
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) |
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