Question

The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $130,500 of direct materials. ACCOUNT Work in Process—Forging Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Nov. 1 Bal., 9,000 units, 50% completed 142,200 30 Direct materials, 82,000 units 1,172,600 1,314,800 30 Direct labor 97,270 1,412,070 30 Factory overhead 134,336 ? 1,546,406 30 Goods finished, ? units ? 30 Bal., 7,200 units, 90% completed ? Cost per equivalent units of $14.30 for Direct Materials and $2.70 for Conversion Costs. Based on the above data, determine each of the following amounts. If required, round your interim calculations to two decimal places. Round final answers (a-c) to the nearest dollar. a. Cost of beginning work in process inventory completed in November. $ b. Cost of units transferred to the next department during November. $ c. Cost of ending work in process inventory on November 30. $ d. Costs per equivalent unit of direct materials and conversion included in the November 1 beginning work in process. If required, round your answers to two decimal places. Direct materials cost per equivalent unit $ Conversion cost per equivalent unit

Having trouble finbding the missing Finished Goods Units.

Answer 1

Solution:

Forging Department
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	9000
Units started this period	82000
Total unit to be accounted for	91000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 50%	9000	0	4500
Started and completed currently	74800	74800	74800
Units in ending WIP Material - 100% Conversion - 90%	7200	7200	6480
Total units accounted for	91000	82000	85780

Forging Department
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$1,404,206.00	$1,172,600.00	$231,606.00
Equivalent units		82000	85780
Cost per equivalent unit		$14.30	$2.70

Forging Department
Producton cost report - FIFO
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$142,200
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (4500 * $2.70)	$12,150		$12,150
Total Cost from beginning inventory	$154,350
Current cost of unit started and completed:
Material (74800*$14.30)	$1,069,640	$1,069,640
Conversion (74800*$2.70)	$201,960		$201,960
Total cost of unit started and completed	$1,271,600
Total cost of unit transferred out	$1,425,950
Cost assigned to ending WIP:
Material (7200*$14.30)	$102,960	$102,960
Conversion (6480*$2.70)	$17,496		$17,496
Total ending WIP inventory	$120,456
Total cost accounted for	$1,546,406

Refer above production report

a. Cost of beginning work in process inventory completed in November = $154,350

b. Cost of units transferred to the next department during November = $1,425,950

c. Cost of ending work in process inventory on November 30 = $120,456

d. Cost per equivalent unit in begnning WIP:

Direct material cost per equivalent unit = $130,500 / 9000 = $14.50

Conversion cost per equivalent unit = ($142,200 - $130,500) / (9000*50%) = $2.60 per unit