Question

Production costs chargeable to the Finishing Department in June in Hollins Company are materials $18,260, labor $39,728, overhead $19,100. Equivalent units of production are materials 20,750 and conversion costs 19,675. Production records indicate that 18,600 units were transferred out, and 2,150 units in ending work in process were 50% complete as to conversion cost and 100% complete as to materials.

Cost Reconciliation Cost accounted for Transferred out Work in process Materials Conversion costs Total cost accounted for

Answer 1

Solution:

Cost per equivalent unit

Material =18,260/20,750 = $0.88

Conversion cost =(39,728 +19,100)/19,675 =2.98

Cost reconcilation
Cost accounted for
Transfered out =2.98+0.88=3.86*18,600		71,796
Work in process
Material(2,150*0.88)	1,892
Conversion cost(2,150*0.50*2.98)	3,203	5,095
Total cost accounted for		76,891