Question

P16.4A (LO 3, 4), AP Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2022 totaled $2,280,000 as follows. Assign costs and prepare production cost report. Work in process, November 1 Materials $79,000 Conversion costs 48,150 $ 127,150 Materials added 1,589,000 Labor 225.920 Overhead 337.930 Production records show that 35,000 units were in beginning work in process 30% complete as to conversion costs, 660,000 units were started into production, and 25,000 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process. Instructions a. Determine the equivalent units of production and the unit production costs for the Assembly Department. b. Determine the assignment of costs to goods transferred out and in process Transferred out WIP $2,211,000 69,000 c. Prepare a production cost report for the Assembly Department.

Answer 1

Rivera Company
As per Question
Work in process - November
material cost $		79,000
Conversion Cost $		48,150
Material Added$		15,89,000
Labour $		2,25,920
Overhead $		3,37,930
As per Question,
		Unit		Unit
Opening Work In process		35,000	Completed during the Year	6,70,000
Add
Started in to Production		6,60,000	Closing WIP	25,000
Total		6,95,000	Total	6,95,000

Answer a	need to claculate Unit details	Unit	%	Material	%	Conversion Cost
	Completed during the Year	6,70,000	100%	6,70,000	100%	6,70,000
	Closing WIP	25,000	100%	25,000	40%	10,000
	Unit			6,95,000		6,80,000
	Cost need to determined
		Material($)		Conversion Cost($)		Total cost($)
	Opening WIP	79,000		48,150		1,27,150
	Add
	Material Added	15,89,000		5,63,850		21,52,850
	Conversion cost - Labour + OH cost
	Labour cost $225920
	Overhead cost$ 337930
	Total Cost-A	16,68,000		6,12,000		22,80,000

Answer b		Material($)		Conversion Cost($)		Total cost($)
	Opening WIP	79,000		48,150		1,27,150
	Add
	Material Added	15,89,000		5,63,850		21,52,850
	Conversion cost - Labour + OH cost
	Labour cost $225920
	Overhead cost$ 337930
	Total Cost-A	16,68,000		6,12,000		22,80,000
	Equivalent Unit ( as above)-B	6,95,000		6,80,000
	rate per unit (A/B)	2.40		0.90		3.30
		Unit -a	Rate -b	Cost$(a*b)
	Unit Transferred ( as above )	6,70,000	3.30	22,11,000
	Add
	Closing WIP
	Material ( as above)	25,000	2.40	60,000
	Conversion cost(as above)	10,000	0.90	9,000
	Total Cost- As derived			22,80,000

Answer C	Cost Report
	Unit movement	Unit
	Opening WIP	35,000
	Add- Started into production	6,60,000
		6,95,000		Material(Unit)		Conversion cost(Unit)
	Transfer out	6,70,000	100%	6,70,000	100%	6,70,000
	WIP closing	25,000	100%	25,000	40%	10,000
	Total			6,95,000		6,80,000
	Cost			Material$		Conversion cost$	Total ($)
	Total Cost ($)( as above )-a			16,68,000		6,12,000
	Equivalent Unit as above)-b			6,95,000		6,80,000
	Rate / unit(a/b)			2.40		0.90	3.30
		Amnt($)
	Opening WIP
	material cost $	79,000
	Conversion Cost $	48,150
	Total Opening WIP	1,27,150
	Add - Material	15,89,000
	Add - Labour	2,25,920
	Add - Overhead	3,37,930
	Total Cost	22,80,000
	Allocation of cost
	Unit Transferred ( as above )$	22,11,000
	Add
	Closing WIP $
	Material ( as above)$	60,000
	Conversion cost(as above)$	9,000
	Total Cost	22,80,000