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Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094

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BuyFindarrow_forward

Accounting

27th Edition
WARREN + 5 others
ISBN: 9781337272094
Textbook Problem

Equivalent units of production and related costs

The charges to Work in Process—Assembly Department for a period, together with information concerning production, are as follows. All direct materials are placed in process at the beginning of production.

Work in Process—Assembly Department
Bal., 1,600 units. 35% completed 17,440 To Finished Goods. 29,600 units ?
Direct materials, 29,000 units & $9.50 275,500  
Direct labor 84,600  
Factory overhead 39,258  
Bal. ? Units. 45% completed ?  

Determine the following:

a. The number of units in work in process inventory at the end of the period

b. Equivalent units of production for direct materials and conversion

c. Costs per equivalent unit for direct materials and conversion

d. Cost of the units started and completed during the period

(a)

Process costs

It is a method of cost accounting, which is used where the production is continuous, and the product needs various processes to complete. This method is used to ascertain the cost of the product at each process or stage of production.

Equivalents units for production

The activity of a processing department in terms of fully completed units is known as equivalent units. It includes the completed units of direct materials and conversion cost of beginning work in process, units completed and transferred out, and ending work in process.

Cost per unit

Total unit cost is the cost incurred by the company to produce one unit of product. The unit cost is calculated by dividing the units produced with the total cost.

To determine

To Identify: The Ending work in process inventory for assembly department.

Explanation

Calculate ending work in process inventory for assembly department as shown below:

Particulars Units
Units in process at beginning of period 1,600
Add: Units placed in production during the period 29,000
Less: Units finished...

(b)

To determine
The equivalent units of production for direct materials and conversion for assembly department.

(c)

To determine
The equivalent cost per equivalent unit for direct materials and conversion costs for assembly department.

(d)

To determine
The cost units for started and completed for assembly department.

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