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Exercise 3-8 (Video) The Blending Department of Luongo Company has the following cost and production data for the month of April
Exercise 3-8 (Video)
The Blending Department of Luongo Company has the following cost and production data for the month of April.
| Costs: | ||
| Work in process, April 1 | ||
| Direct materials: 100% complete | $107,000 | |
| Conversion costs: 20% complete | 74,900 | |
| Cost of work in process, April 1 | $181,900 | |
| Costs incurred during production in April | ||
| Direct materials | $856,000 | |
| Conversion costs | 390,550 | |
| Costs incurred in April | $1,246,550 |
Units transferred out totaled 18,190. Ending work in process was 1,070 units that are 100% complete as to materials and 40% complete as to conversion costs.
Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of April.
Compute the unit costs for the month.
Determine the costs to be assigned to the units transferred out and in ending work in process.
Expert Solution
|
(1)
Materials |
(2)
Conversion Costs |
|||
| Units transferred out | 18,190 | 18,190 | ||
| Work in process, April 30 | ||||
| 1,070 × 100% | 1,070 | |||
| 1,070 × 40% | 428 | |||
| Equivalent units of production | 19,260 | 18,618 |
|
Materials |
Conversion
Costs |
Total |
||||||
| Total Costs | $963,000 | * | $465,450 | ** | $1,428,450 | |||
| Equivalent units | 19,260 | 18,618 | ||||||
| Unit costs | $50 | $25 | $75 | |||||
| * $107,000 + $856,000 = $963,000 |
| ** $74,900 + $390,550 = $465,450 |
(DM: ($107,000 + $856,000) ÷ (18,190 + 1,070) = $50)
(DM: (DM costs in beg. WIP + DM costs added) ÷ (Units transferred out + (Units in end. WIP x % complete)) = DM cost/unit)
(CC: ($74,900 + $390,550) ÷ (18,190 + (1,070 x 40%)) = $25)]
(CC: CC in beg. WIP + CC costs added) ÷ (Units transferred out + (Units in end. WIP x % complete)) = CC cost/unit)
|
Transferred out (18,190 × $75)
|
$1,364,250
|
|||
|
Work in process
|
||||
|
Materials (1,070 × $50)
|
$53,500
|
|||
|
Conversion costs (428 × $25)
|
10,700
|
64,200
|
||
|
Total costs
|
$1,428,450
|
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