Question

Superior Micro Products uses the weighted average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,600 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $666,130 in total. The ending work in process inventory in January consisted of 2,500 units, which were 60% complete with respect to materials and 40% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials $ 12.90 Cost per equivalent unit Labor $ 4.10 Overhead $ 7.80 Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January. 3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January 4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.) Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. Materials Labor Overhead Equivalent units Required 1 Required 2 >

Answer 1

1

Computation of Equivalent units

Particulars	Materials	Labor	Overhead
Ending work in process inventory	2500 units	2500 units	2500 units
% Completion	60%	40%	40%
Equivalent units (Ending work in process inventory X % Completion)	1500 units	1000 units	1000 units

2

Computation of cost of ending work in process

Particulars	Materials	Labor	Overhead	Total
Equivalent units	1500 units	1000 units	1000 units
Cost per equivalent unit	$12.90	$4.10	$7.80
Cost of ending work in process (Equivalent units X Cost per equivalent unit)	$19350	$4100	$7800	$31250

3

Computation of cost of units transferred to next department

Particulars	Materials	Labor	Overhead	Total
Units completed and transferred out	25600 units	25600 units	25600 units
Cost per equivalent unit	$12.90	$4.10	$7.80
Cost of units transferred to next department (Units completed and transferred out X Cost per equivalent unit)	$330240	$104960	$199680	$634880

4

Cost reconciliation

Particulars	Amount ($)
Total cost to be accounted for	666130
Costs accounted for as follows:
Cost of ending work in process ($19350 + $4100 + $7800)	31250
Cost of units transferred to next department ($330240 + $104960 + $199680)	634880
Total cost accounted for	666130

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