Question

In March, Kelly Company had the following unit production costs: materials $10 and conversion costs $8. On March 1, it had no work in process. During March, Kelly transferred out 22,000 units. As of March 31, 4,000 units that were 40% complete as to conversion costs and 100% complete as to materials were in ending work in process.

Required:
a. Compute the total units to be accounted for.
b. Compute the equivalent units of production.
c. Prepare a cost reconciliation schedule, including the costs of materials transferred out and the costs of materials in process.

Answer 1

Following are the solution to the given points:

Step-by-step explanation:

For point a:

The total units to be accounted for
`=22,000+4,000=26,000` units

For point b:

The total material equivalent units =
`22,000` finished units
`+ 4,000=26,000` units

The total conversion equivalent units =
`22,000` finished units +
`4,000 * 40\%`

`=22,000+ 1,600\\\\=23,600`

For point c:

Calculating the total cost reconciliation schedule:

Cost accounted for finished goods
`\$396,000`

Cost of material in the process

material work in process
`\$40,000`

conversion cost in the process
`\$12,800 \ \ \ \ \ \ \ \$52,800 \\\\`
`\$448,800`