Question

Fedora, Inc, uses a weighted average process-costing system and has one production department. All materials are introduced at the start of manufacturing: in contrast, conversion cost is incurred uniformly throughout production. The company had respective work in process inventories on May 1 and May 31 of 62,100 units and 70,500 units, the latter of which was 50% complete. The production supervisor noted that Fedora completed 100,000 units during the month. Costs in the May 1 work-in-process inventory were subdivided as follows: materials. $40.500; conversion, $91,000. During May. Fedora charged production with $368.700 of material and $720,000 of conversion, resulting in a material cost per equivalent unit of $2.10. Required: A. Determine the number of units that Fedora started during May, B. Compute the number of equivalent units with respect to conversion cost. C. Determine the conversion cost per equivalent unit. (Round your final answers to two decimal places.) D. Compute the cost of the May 31 work-in-process inventory. (Round your intermediate calculations to 2 decimal places and final answers to nearest whole dollar.) E. What account would have been credited to record Fedora's completed production? A Number of units B Number of equivalent units C. Conversion cost per equivalent unit D Cost of work in process inventory E. Which record would have been credited < Prey 4 of 4 !! Next > e to search

Answer 1

A.

Units started = Units completed + Units in ending work in process + Units in beginning work in process

= 100,000 + 70,500 - 62,100

= 108,400 units

B.

Equivalent units for conversion cost:

= Units completed + (Units in ending work in process X % of ending work in process completion)

= 100,000 + (70,500 X 50%)

= 135,250 units

C.

Conversion cost per equivalent unit = Total conversion cost / Equivalent units for conversion cost

= ($91,000 + $720,000) / 135,250

= $6 per unit

D.

All the material are introduced at the starting of manufacturing process. For units in ending work in process, all the material is introduced. The equivalent units for material in ending work in process is 70,500 units. Equivalent units for conversion cost in ending work in process = 70,500 X 50% = 35,250

Cost of work in process inventory:

= (Equivalent units for material X Material cost per equivalent unit) + (Equivalent units for conversion cost X Conversion cost per equivalent unit)

= (70,500 X $2) + (35,250 X $6)

= $352,500

E.

Work in process would be credited to record completed production.