Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,100 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $671,610 in total. The ending work in process inventory in January consisted of 3,000 units, which were 60% complete with respect to materials and 40% complete with respect to labor and overhead.

The costs per equivalent unit for the month were as follows: Materials 13.70 labor 3.50 Overhead 7.10

Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

Answer

1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month.

	Whole unit	% material	EUP-material	% labour	EUP-labour	% overhead	EUP-overhead
Ending work in process	3000	60%	1800	40%	1200	40%	1200

2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January.

	Material	Labour	overhead	Total
Cost of ending work in process	1800*13.70 = 24660	1200*3.5 = 4200	1200*7.10 = 8520	37380

3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January.

	Material	Labour	Overhead	Total
Cost of units transferred out	26100*13.7 = 357570	91350	185310	634230

4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Total cost to be accounted for	671610
Cost accounted as
Cost of units transferred out	634230
Cost of ending work in process	37380
Total cost accounted as	671610