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The Smelting Department of Polzin Company has the following production and cost data for September. Production Beginning work in process 2,000 units that are 100% complete as to ma- terials and 20% complete as to conversion costs; units started and finished 9,000 units; and ending work in process 1,000 units that are 100% complete as to materials and 40% complete as to conversion costs.

Manufacturing costs Work in process, September 1, $15,200 materials added $60,000; labor and overhead $132,000. Polzin uses the FIFO method to compute equivalent units. Instructions (a) Compute the equivalent units of production for (1) materials and (2) conversion costs for the month of September. (b) Compute the unit costs for the month. (c) Determine the costs to be assigned to the units transferred out and in process.​

User Paku
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Answer:

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Step-by-step explanation:

(a) To compute the equivalent units of production for materials and conversion costs for the month of September, we need to consider the percentage of completion for each unit.

Equivalent units of production for materials:

Beginning work in process: 2,000 units * 100% complete = 2,000 units

Units started and finished: 9,000 units * 100% complete = 9,000 units

Ending work in process: 1,000 units * 100% complete = 1,000 units

Total equivalent units of production for materials: 2,000 units + 9,000 units + 1,000 units = 12,000 units

Equivalent units of production for conversion costs:

Beginning work in process: 2,000 units * 20% complete = 400 units

Units started and finished: 9,000 units * 100% complete = 9,000 units

Ending work in process: 1,000 units * 40% complete = 400 units

Total equivalent units of production for conversion costs: 400 units + 9,000 units + 400 units = 9,800 units

(b) To compute the unit costs for the month, we need to divide the total manufacturing costs by the equivalent units of production.

Unit cost for materials: $60,000 / 12,000 units = $5 per unit

Unit cost for conversion costs: $132,000 / 9,800 units = $13.47 per unit

(c) To determine the costs to be assigned to the units transferred out and in process, we multiply the unit costs by the equivalent units of production.

Costs assigned to units transferred out:

Materials: $5 per unit * 9,000 units = $45,000

Conversion costs: $13.47 per unit * 9,000 units = $121,230

Costs assigned to units in ending work in process:

Materials: $5 per unit * 1,000 units = $5,000

Conversion costs: $13.47 per unit * 400 units = $5,388

Therefore, the costs to be assigned to the units transferred out and in process are as follows:

- Units transferred out: $45,000 for materials and $121,230 for conversion costs

- Units in ending work in process: $5,000 for materials and $5,388 for conversion costs.

User Romuleald
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