account work in process-forging department account no.
date item debit credit balance debit balance credit
june 1 bal., 1,800 units, 60% completed 21,132
30 direct materials, 25,800 units 247,680 268,812
30 direct labor 43,300 312,112
30 factory overhead 33,740 345,852
30 goods transferred, ? units ? ?
30 bal., 2,800 units, 70% completed ?
cost per equivalent units of $9.60 for direct materials and $3.00 for conversion costs.
based on the above data, determine each of the following amounts. if required, round your interim calculations to two decimal places. round final answers (a-c) to the nearest dollar.
a. cost of beginning work in process inventory completed in june
$
b. cost of units transferred to the next department during june
$
c. cost of ending work in process inventory on june 30
$
d. costs per equivalent unit of direct materials and conversion included in the june 1 beginning work in process (if required, round your answers to two decimal places.)
direct materials cost per equivalent unit $

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Accepted Answer

{ "quality": "clear", "question_count": 4, "skills_matched": [ "step_cot", "explain_then_answer", "tutor", "mastery_adaptive_brevity" ], "needs_drawing": false, "concepts_used": [ "Equivalent Units", "Process Costing", "FIFO Method" ], "new_concepts": [], "current_concepts": [ "Equivalent Units", "Process Costing", "FIFO Method" ] } ## Determine physical flow and started & completed units Using the *FIFO Method* and *Process Costing* knowledge points $$ \begin{aligned} &\text{Beginning WIP (June 1)} = 1,800\text{ units (60\% complete)} \ &\text{Units started in June} = 25,800\text{ units} \ &\text{Ending WIP (June 30)} = 2,800\text{ units (70\% complete)} \ &\text{Total units to account for} = 1,800 + 25,800 = 27,600\text{ units} \ &\text{Units transferred out} = \text{Total units} - \text{Ending WIP} = 27,600 - 2,800 = 24,800\text{ units} \ &\text{Units started and completed} = \text{Units transferred out} - \text{Beginning WIP} = 24,800 - 1,800 = 23,000\text{ units} \end{aligned} $$ ## Calculate cost of beginning work in process completed in June Using the *Equivalent Units* and *FIFO Method* knowledge points $$ \begin{aligned} &\text{Beginning WIP balance on June 1} = \$21,132 \ &\text{Materials added to complete (FIFO assumes materials added at start, so 0\% needed)} = 0\text{ units} \times \$9.60 = \$0.00 \ &\text{Conversion needed to complete} = 1,800\text{ units} \times (100\% - 60\%) = 720\text{ equivalent units} \ &\text{Conversion cost added} = 720 \times \$3.00 = \$2,160.00 \ &\text{Total cost of completed beginning WIP (a)} = \$21,132 + \$0 + \$2,160 = \$23,292 \end{aligned} $$ ## Calculate cost of units transferred to the next department Using the *Process Costing* and *FIFO Method* knowledge points $$ \begin{aligned} &\text{Cost of started and completed units} = 23,000\text{ units} \times (\$9.60 + \$3.00) = 23,000 \times \$12.60 = \$289,800.00 \ &\text{Total cost transferred out (b)} = \text{Cost of completed beginning WIP} + \text{Cost of started and completed} \ &\text{Total cost transferred out (b)} = \$23,292 + \$289,800 = \$313,092 \end{aligned} $$ ## Calculate cost of ending work in process inventory Using the *Equivalent Units* and *Process Costing* knowledge points $$ \begin{aligned} &\text{Ending WIP Materials cost} = 2,800\text{ units} \times 100\% \times \$9.60 = \$26,880.00 \ &\text{Ending WIP Conversion cost} = 2,800\text{ units} \times 70\% \times \$3.00 = 1,960\text{ equivalent units} \times \$3.00 = \$5,880.00 \ &\text{Total ending WIP cost (c)} = \$26,880 + \$5,880 = \$32,760 \end{aligned} $$ ## Calculate June 1 beginning work in process unit costs Using the *Equivalent Units* and *Process Costing* knowledge points $$ \begin{aligned} &\text{Let } M \text{ be the materials cost per equivalent unit in beginning WIP.} \ &\text{Let } C \text{ be the conversion cost per equivalent unit in beginning WIP.} \ &\text{Beginning WIP total cost} = (1,800 \times 100\% \times M) + (1,800 \times 60\% \times C) = 21,132 \ &1,800M + 1,080C = 21,132 \ &\text{Assuming the ratio of unit costs in beginning WIP is the same as June's current costs:} \ &\frac{M}{C} = \frac{9.60}{3.00} = 3.2 \implies M = 3.2C \ &1,800(3.2C) + 1,080C = 21,132 \implies 5,760C + 1,080C = 21,132 \implies 6,840C = 21,132 \ &C = \frac{21,132}{6,840} \approx \$3.09\text{ per equivalent unit} \ &M = 3.2 \times 3.08947 \approx \$9.89\text{ per equivalent unit} \end{aligned} $$ ## Question a Cost of beginning work in process inventory completed in June: $ 23,292 ## Question b Cost of units transferred to the next department during June: $ 313,092 ## Question c Cost of ending work in process inventory on June 30: $ 32,760 ## Question d Costs per equivalent unit of direct materials and conversion included in the June 1 beginning work in process: Direct materials cost per equivalent unit $ 9.89 { "subject": "Business", "question_type": "Multi-part", "knowledge_point": [ "Business", "Accounting", "Process Costing" ] }

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Question

Explanation:

Determine physical flow and started & completed units

Calculate cost of beginning work in process completed in June

Calculate cost of units transferred to the next department

Calculate cost of ending work in process inventory

Calculate June 1 beginning work in process unit costs

Answer:

Question a

Question b

Question c

Question d