Question

The ledger of American Company has the following work in process account. Work in Process --Painting 5/1 Balance 3,7905/31 Transferred out 5/31 Materials 5.780 5/21 Labor 2,478 5/31 Overhead 2.280 5/21 Balance Production records show that there were 500 units in the beginning inventory, 30% complete, 1,700 units started, and 1,500 units transferred out. The beginning work in process had materials cost of $2,140 and conversion costs of $1,650. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. How many units are in process at May 31? Work in process, May 21 What is the unit materials cost for May? (Round unit cost to 2 decimal places, e.g. 2.25.) The unit materials cost for May What is the unit conversion cost for May? (Round unit cost to 2 decimal places, e.g. 2.25.) The unit conversion cost for May What is the total cost of units transferred out in May? The total cost of units transferred out in May What is the cost of the May 31 inventory? Work in process Click if you would like to Show Work for this question Open Show Work

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer Part 1) No. of units in process at May 31 = Beginning units + units started - units trasnferred out = 500 +1700-1500 = 700 Units Thus the correct answer is 1700 Units Part 2) Unit material cost = Total cost of material including material cost in beginning inventory / equivalent units of material = (2140+5780)/(1500+700) = $3.6 - Thus the correct answer is $ 3.6 - Part 3) Unit Conversion cost = Total conversion cost including conversion cost in beginning inventory / equivalent units of conversion cost = (1650+2478+2280)/((1500*100%)+(700*40%)) = $ 3.6 Thus the correct answer is $ 3.6

А D F G H к M Part 4) Total cost of units transferred out = no. of units transferred out * (material cost per unit + converison cost per unit) = 1500*(3.6+3.6) = $ 10800 Thus the correct answer is $ 10800 Part 5) Cost of inventory on May 31 = (Equivalent material unit * cost per unit of material) +(Equivalent unit of conversion cost* cost per unit of conversion cost) = ((700*100%) *3.6)+((700*40%)*3.6) = 2520+1008 = $ 3528 Thus the correct aswer is $ 3528