Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,500 units and transferred them to the next department. The cost of beginning work in process inventory and the costs added during January amounted to $622,110 in total. The ending work in process inventory in January consisted of 2,100 units, which were 60% complete with respect to materials and 40% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows: Materials Labor Overhead Cost per equivalent unit $ 13.70 $ 3.20 $ 6.50 Required: 1. Compute the equivalent units of materials, labor, and overhead in the ending work in process inventory for the month. 2. Compute the cost of ending work in process inventory for materials, labor, overhead, and in total for January. 3. Compute the cost of the units transferred to the next department for materials, labor, overhead, and in total for January. 4. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning work in process inventory and costs added during the month.)

Answer 1

EU materials 26,760

EU conversion 26,340

WIP ending 25,410

transferred out 596,700

}

Cost to be accounted for: 622,110

cost accounted for:

ending WIP inventory 25,410

finished goods inventory 596,700

Step-by-step explanation:

WA Equivalent units:

completed units 55,500

ending WIP inventory 2,100 x 60% 1,260 materials

2,100 x 40% 840 conversion

materials: 25,500 + 1,260 = 56,760

conversion: 25,500 + 840 = 56,340

Ending WIP valuation:

Materials: 1260 x 13.7 = 17,262

Labor 840 x 3.2 = 2,688

Overhead 840 x 6.5 = 5,460

Total ending WIP 25,410

Transferred-out:

25,500 x (13.7 + 3.2 + 6.5) =

25,500 x 23.4 = 596,700