Question

Naus Steel Company has two departments. Casting and Rolling. In the Rolling Department, ingots from the Casting Department are rolled into steel sheet. The Rolling Department received 4,000 CONS from the Casting Department in October. During October. the Rolling Department completed 3,00 tons, including 200 tons of work in process on October 1. The ending work in process inventory on October 31 was 300 tons. The Rolling Department of Kraus Steel Company had 200 tons in beginning work in process inventory (60% complete) on October 1. During October, 3,900 tons were completed. The ending work in process inventory on October 31 was 300 tons (25% complete). Materials are added at the beginning of the process. The cost of direct materials transferred into the Rolling Department of Kraus Company is $3,000,000. The conversion cost for the period in the Rolling Department is $462,600. The beginning work in process inventory on October 1 had a cost of $163,800. Determine the cost of completed and transferred-out production, the ending work in process inventory, and the total costs assigned by the Rolling Department.

Answer 1

Answer

The wip completed Units during the month of October

Particulars	Units	% of complete	Completed Units
Wip opening	200	60%	120
Wip Closing	300	25%	75

Total completed units transfered =3900

Closing wip Units completed =75

Total units converted =3975

The total cost of equivalent completed units

Particulars	Amount
opening Wip inventory cost	$163800
Direct Material cost	$3000000
Conversion cost	$ 462600
Total cost	$3626400
Equivalent units completed	3975
Cost per unit completed	$3626400/3975 = 912.30

Total cost of completed  units =912.30*3975

=$3626400

Total cost of transfered production =3900*912.30

=$3557970

Total cost of closing wip units =75*912.30

=$ 68422.5

The total cost Assigned by rolling department = $3626400