Valuation of ending work-in process

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Reference no: EM1313845

Valuation of Ending Work-in Process using process costing.

The following information is available for Department A for the month of July

	Units	Cost
Work in process, July 1 (60% complete)	5,000
Direct materials		$12,000
Conversion		18,000
Total work in process, July 1		$30,000
Started in production during July	20,000
Costs added:
Direct materials		$36,000
Conversion		52,000
Total costs added during July		$88,000

Work in process, July 31, (40% complete) 2,000
Materials are added at the beginning of the process. (Round to two decimal places.)

*PARTICULARS*	*MATERIALS*	*CONVERSION*
*Opening*	*12000*	*18000*
*Cost incurred*	*36000*	*52000*
*Total Cost*	*48000*	*70000*
*EQUIVALENT UNITS OF PRODUC TION*
*Transferred out*	*23000*	*23000*
*Work-in-process*	*2000*	**(200040%)= 800***
*25000*	*23800*
*Cost per equivalent production*	*=48000/25000=1.92*	*=70000/23800=2.94*
*COST OF GOODS TRANSFERRED OUT*	**(1.92+2.94)23000***	*=111780*
*Ending work-in-process*	**=(20001.92)+(8002.94)**	*=6192*

Work in process, July 31, (40% complete) 2,000
Materials are added at the beginning of the process. (Round to two decimal places.)

1. Refer to Figure 6-6. Department A's cost per equivalent unit of production for materials using the weighted average method would be

a. $2.40

b. $2.08

c. $1.92

d. $1.80

2. Refer to Figure 6-6. Department A's cost per equivalent unit of production for conversion using the weighted average method would be

a. $2.60

b. $2.94

c. $3.04

d. $3.50

3. Refer to Figure 6-6. Department A's cost of goods transferred out using the weighted average method would be

a. $97,200

b. $80,500

c. $111,780

d. $118,000

4. Refer to Figure 6-6. Department A's cost of ending work in process using the weighted average method would be

a. $8,741

b. $6,192

c. $3,840

d. $10,261

The following information is available for Department Z for the month of July:

	Units	Cost
Work in process, July 1 (70% complete)	5,000
Direct materials		$ 6,000
Direct labor		3,000
Manufacturing overhead		4,000
Total work in process, July 1		$13,000
Started in production during July	20,000
Costs added:
Direct materials		$18,000
Direct labor		8,000
Manufacturing overhead		10,000
Total costs added during July		$36,000
Work in process, July 31, (80% complete)	2,000

Materials are added at the beginning of the process. (Round unit costs to two decimal places.)
Materials are added at the beginning of the process. (Round unit costs to two decimal places.)

*PARTICULARS*	*MATERIALS*	*CONVERSION*
*Opening WIP*	-	**(5000(100-70)%)=1500***
*Units completed in this process* *(20000-2000)*	*18000*	*18000*
*Closing WIP*	*2000*	**(200080%)=1600***
*Equivalent production*	*20000*	*21100*
*cost*	*$18,000*	*$18,000*
*Cost Per Equivalent units*	*=18000/20000=$0.90*	*=18000/21100=$0.85*
*Cost of goods transferred:*
*Opening* *Completed and transferred*	**(13000)+(15000.85)=14275* (18000)(0.90+0.85)=31500***	*=45775*
*Closing WIP*	**(20000.90)+(16000.85)**	*=3160*

5. Refer to Figure 6-7. Department Z's cost per equivalent unit of production for conversion costs using the FIFO method would be

a. $1.18

b. $1.02

c. $0.85

d. $0.73

6. Refer to Figure 6-7. Department Z's cost of goods transferred out using the FIFO method would be

a. $45,775

b. $45,540

c. $44,500

d. $40,250

7. Refer to Figure 6-7. Department Z's cost of ending work in process using the FIFO method would be

a. $3,960

b. $3,552

c. $3,500

d. $3,160

Reference no: EM1313845

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