Reference no: EM13350327
Question
Bell Computers, Ltd., located in Liverpool, England accumulates a standardized personal computer from parts it purchases from various suppliers. The production process contains of several steps starting with assembly of the mother circuit board which contains the central processing unit. This association takes place in the CPU Assembly Department. The company freshly 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 specific additional information about May's operation in the CPU Assembly Department. (The currency in England is the pound which is signified by the symbol £.)
Required-
1. How many units were started and completed during May?
Units started and completed during May
2. What were the equivalent units of production for May for materials and conversion costs?
Materials Conversion
Equivalent units of production
3. What were the costs per equal unit for May? The following additional data are obtainable 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
4. Calculate the material cost as well as the conversion cost of the ending work in process. (Round your cost per equivalent unit calculation to 2 decimal places and final answers to the nearest whole dollar amount.)
Materials Conversion Total
Ending work in process inventory
Equivalent units of production
Cost per equivalent unit
Cost of ending work in process inventory
5. The new manager of the CPU Assembly Department was requested to estimate the incremental cost of processing an additional 1,000 units through the department. He took the unit cost for an comparable whole unit you computed in (3) above and multiplied this figure by 1,000. Will this method yield a valid estimation of incremental cost?