Question

Equivalent Units of Production

The Converting Department of Hopkinsville Company had 1,040 units in work in process at the beginning of the period, which were 40% complete. During the period, 21,600 units were completed and transferred to the Packing Department. There were 1,160 units in process at the end of the period, which were 40% complete. Direct materials are placed into the process at the beginning of production.

Determine the number of equivalent units of production with respect to direct materials and conversion costs. If an amount is zero, enter in "0".

Hopkinsville Company
Number of Equivalent Units of Production
	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
Inventory in process, beginning
Started and completed
Transferred to Packing Department
Inventory in process, ending
Total

Predetermined Factory Overhead Rate

Poehling Medical Center has a single operating room that is used by local physicians to perform surgical procedures. The cost of using the operating room is accumulated by each patient procedure and includes the direct materials costs (drugs and medical devices), physician surgical time, and operating room overhead. On January 1 of the current year, the annual operating room overhead is estimated to be:

Disposable supplies		$290,400
Depreciation expense		52,400
Utilities		30,500
Nurse salaries		436,000
Technician wages		142,700
	Total operating room overhead	$952,000

The overhead costs will be assigned to procedures, based on the number of surgical room hours. Poehling Medical Center expects to use the operating room an average of eight hours per day, seven days per week. In addition, the operating room will be shut down two weeks per year for general repairs.

a. Determine the predetermined operating room overhead rate for the year.
$ per hour

b. Bill Harris had a 7-hour procedure on January 22. How much operating room overhead would be charged to his procedure, using the rate determined in part (a)?
$

c. During January, the operating room was used 186 hours. The actual overhead costs incurred for January were $61,800. Determine the overapplied operating overhead or underapplied operating overhead for the period. Enter your answer as a positive number.
$ overapplied

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Answer 1

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Statement of Equivalent production
Particulars	Direct Materials	%completion	Equivalent mat	Conversion	%completion	Equivalent Conv
Inventory in process, beginning	1,040.00	0%	-	1,040.00	60%	624.00
Started and completed = 21,600 -1040	20,560.00	100%	20,560.00	20,560.00	100%	20,560.00
Transferred to Packing Department	21,600.00
Inventory in process, ending	1,160.00	100%	1,160.00	1,160.00	40%	464.00
Equivalent Units			21,720.00			21,648.00
Note - Assumed FIFOmethod in absence of information