Question

Problem 3-2 Cinrich Filters produces an air filter for use in jet aircraft. Parts are added at several points in the production process. In August, production began with 650 filters in Work in Process, 70 percent complete as to materials and 80 percent complete as to labor and overhead. During the month, an additional 2,610 units were started into production. 800 filters were in Work in Process at the end of the month, and they were 50 percent complete as to materials and 40 percent complete as to labor and overhead. Cost Information for August Beginning Work in Process Inventory Costs Added in August Direct material $43,000 $265,880 Direct labor 10,400 70,220 Manufacturing overhead 73,800 504,440 Total $127,200 $840,540

Calculate the cost per equivalent unit for each of the three cost items and in total. Cost per EU Material $ Labor Overhead Total $ LINK TO TEXT

Calculate the cost of items completed in August and the cost of ending Work in Process inventory. Cost of items completed in August $ Cost of ending Work in Process $

Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in August. Beginning work in process $ Cost added Total $ Cost of items completed $ Cost of ending WIP Total $

Answer 1

Answer

• Working

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion (lab + Overhead)	EUP – Conversion (Labor + Overhead)
Units TRANSFERRED	2,460	100%	2,460	100%	2,460
Units of ENDING WIP	800	50%	400	40%	320
Equivalent Units of Production			2,860		2,780

• Requirement 1

		Cost per EU
Material		$ 108
Labor		$ 29
Overhead		$ 208
Total		$ 345

--Working

COST per EUP			Material	Labor	Overhead
Cost of Beginning WIP			$          43,000.00	$                                  10,400.00	$                                  73,800.00
Cost incurred during the period			$        265,880.00	$                                  70,220.00	$                                504,440.00
Total Costs		Costs	$        308,880.00	$                                  80,620.00	$                                578,240.00
Equivalent units of production		EUP	2,860	2,780	2,780
Cost per EUP			$         108.00000	$                                   29.00000	$                                 208.00000

Requirement 2.

Cost of items completed in August	[2460 units x $ 345]	$ 848,700
Cost of ending Work in Process	[(400 units x$ 108)+ (320 x $ 29) + (320 x $208)]	$ 119,040

• Requirement 3

Beginning work in process		$ 127200
Cost added		$ 840540
Total		$ 967740
Cost of items completed		$ 848700
Cost of ending WIP		$ 119040
Total		$ 967740