Question

Exercise 5-12 Equivalent Units; Assigning Costs; Cost Reconciliation-Weighted-Average Method [LO5-2, LO5-4, LO5-5) Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,600 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $666,200 in total. The ending work in process inventory in January consisted of 2,300 units, which were 70% complete with respect to materials and 50% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials $ 12.50 Cost per equivalent unit Labor $ 4.50 Overhead $ 6.80 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.)

Answer 1

1.

Equivalent units:

Material:

= 2,300 X 70%

= 1,610

Labor:

= 2,300 X 50%

= 1,150

Overhead:

= 2,300 X 50%

= 1,150

2.

Material

= 1,610 X $12.50

= $20,125

Labor:

= 1,150 X $4.50

= $5,175

Overhead:

= 1,150 X $6.80

= $7,820

Total:

= $20,125 + $5,175 + $7,820

= $33,120

3.

Material:

= 26,600 X $12.50

= $332,500

Labor:

= 26,600 X $4.50

= $119,700

Overhead:

= 26,600 X $6.80

= $180,880

Total:

= $332,500 + $119,700 + $180,880

= $633,080

4.

Total cost to be accounted for	$666,200
Cost accounted for as follows
Cost of ending work in process inventory	$33,120
Cost of units completed and transferred out	$633,080
Total cost accounted for	$666,200