Question

Exercise 4-12 Equivalent Units; Assigning Costs; Cost Reconciliation-Weighted-Average Method [LO4-2, LO4-4, LO4-5) Superior Micro Products uses the weighted average method in its process costing system. During January, the Delta Assembly Department completed its processing of 26,900 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $676,264 in total. The ending work in process inventory in January consisted of 3,400 units, which were 50% complete with respect to materials and 30% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Cost per equivalent unit Materials $ 13.20 Labor $ 3.5e Overhead $ 7.20 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

						EUP-		EUP-		EUP
1)	Equivalent units of production			units	%	materials	%	labor	%	overhead
	completed & transferred			26,900	100%	26,900	100%	26,900	100%	26,900
	ending wip			3,400	50%	1700	30%	1020	30%	1020
						28,600		27,920		27,920
				Materials	Labor	Overhead
	Equivalent units of production			28,600	27,920	27,920
2)					Materials	labor	overhead	Total
	Cost of ending work in process inventory				22440	3570	7344	33354
	(EUP units*cost per equivalent units)
3)					Materials	labor	overhead	Total
	cost of units completed & transferred out				355080	94150	193680	642910
4)	Cost Reconciliation
	total cost to be accounted for				676,264
	Costs accounted for as follows:
	cost of units completed & transferred out				642910
	Cost of ending work in process inventory				33354
	total cost accounted for				676264