Question

Exercise 16-09 a-c (Video) Vaughn Company has gathered the following information. 43,600 7,000 Units in beginning work in process Units started into production Units in ending work in process Percent complete in ending work in process: Conversion costs Materials Costs incurred: Direct materials Direct labor Overhead 40 % 100 % $82,840 $70,400 $106,900 Compute equivalent units of production for materials and for conversion costs. Materials Conversion Costs The equivalent units of production

Answer 1

Solution

	Material	Conversion
Equivalent Units of Production	43,600	39,400

.

	Material	Conversion
Unit cost	$                    1.90	$                   4.50

.

Units Transferred out	$             234,240
Units in ending Work in process	$                25,900

Working

Reconciliation of Units
A	Beginning WIP	-
B	Introduced	43,600
C=A+B	TOTAL	43,600
D	Transferred out	36,600
E=C-D	Ending WIP	7,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	36,600			100%	36,600	100%	36,600
Ending WIP	7,000			100%	7,000	40%	2,800
Total	43,600			Total	43,600	Total	39,400

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost				$ 0
Cost incurred during period		$ 82,840	$ 177,300	$ 260,140
Total Cost to be accounted for		$ 82,840	$ 177,300	$ 260,140
Total Equivalent Units		43,600	39,400
Cost per Equivalent Units		$                   1.90	$                     4.50	$                6.40

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 1.90	7,000	$          13,300.00	36,600	$ 69,540
Conversion cost	$ 4.50	2,800	$          12,600.00	36,600	$ 164,700
TOTAL	$ 260,140	TOTAL	$ 25,900	TOTAL	$ 234,240