Bell computers ltd located in liverpool england gathers a

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Reference no: EM13350922

Bell Computers, Ltd., located in Liverpool, England, gathers a standardized personal computer from parts it purchases from various suppliers. The production process consists of several steps, starting with assembly of the "mother" circuit board, which contains the central processing unit. This assembly takes place in the CPU Assembly Department. The company recently hired a new accountant who prepared the following report for the department for May using the weighted-average method:

Units to be accounted for:

Work in process, May 1: materials 90%

complete; conversion 80% complete 5,200

Started into production 35,500

Total units 40,700

Units accounted for as follows:

Transferred to next department 31,300

Work in process, May 31: materials 75%

complete; conversion 50% complete 9,400

Total units 40,700

Cost Reconciliation

Cost to be accounted for:

Work in process, May 1 £ 18,980

Cost added in the department 133,509

Total cost to be accounted for £152,489

Cost accounted for as follows:

Work in process, May 31 £25,098

Transferred to next department 127,391

Total cost accounted for £152,489

The company's management would like some additional information about May's operation in the CPU Assembly Department. (The currency in England is the pound, which is denoted by the symbol £.)

Required:

Q1. How many units were completed and started during May? Units started and completed during May

Q2. What were the equivalent units of production for May for conversion costs and materials?

Materials Conversion

Equivalent units of production

Q3. What were the costs per equivalent unit for May? The subsequent additional data are available concerning the department's costs (Round your answers to 2 decimal places):

Materials Conversion Total

Work in process, May 1 £12,168 £6,812 £18,980

Costs added during May £85,241 £48,268 £133,509

Materials Conversion

Cost per equivalent unit £ £

Q4. Calculate the material cost and the conversion cost of the ending work in process.

Materials Conversion Total

Ending work in process inventory:

Equivalent units of production

Cost per equivalent unit

Cost of ending work in process inventory

Q5. The new manager of the CPU Assembly Department was asked to estimate the incremental cost of processing an additional 1,000 units during the department. He took the unit cost for an equivalent entire unit you computed in (3) above and multiplied this figure by 1,000. Will this technique yield a valid estimate of incremental cost?

Reference no: EM13350922

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