Question

The Mixing Department of Bravo Company has the following cost and production data for the month of April.

Costs:
Work in process, April 1
Direct materials: 100% complete		$100,000
Conversion costs: 20% complete		70,000
Cost of work in process, April 1		$170,000
Costs incurred during production in April
Direct materials		$ 800,000
Conversion costs		365,000
Costs incurred in April		$1,165,000

Units transferred out totaled 17,000. Ending work in process was 1,000 units that are 100% complete as to materials and 40% complete as to conversion costs.

Compute the equivalent units of production for

(1) materials for the month of April.

(2) conversion costs for the month of April

Answer 1

Computation of equivalent units of production:

		Equivalent units of production
	Physical units	Material		Conversion costs
units accounted for		% completion	units	% completion	units
Transferred out	17000	100%	17000	100%	17000
Ending work in process	1000	100%	1000	40%	400
Equivalent units of production			18000		17400

Cost per Equivalent unit:

	Material	Conversion costs
Beginning working progress	100000	70000
Cost incurred during period	800000	365000
Total cost to account for	900000	435000
Equivalent units(refer above)	18000	17400
Cost per equivalent unit(cost/units)	$50	$25

Cost for units transferred out and ending work in process:

Cost to be assigned to the units transferred out:

Material cost	17000 * $50= $850000
Conversion costs	17000 * $25= $425000
Total cost	$1275000

Cost to be assigned to the units of ending work in progress:

Material cost	1000 * $50= $50000
Conversion costs	400 * $25= $10000
Total cost	$60000