Question

Superior Micro Products uses the weighted-average method in its process costing system. During January, the Delta Assembly Department completed its processing of 25,400 units and transferred them to the next department. The cost of beginning inventory and the costs added during January amounted to $716,080 in total. The ending inventory in January consisted of 2,600 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 OverheadCost per equivalent unit $14.40 $4.50 $7.90Required:1. Compute the equivalent units of materials, labor, and overhead in the ending inventory for the month.2. Compute the cost of ending inventory and of the units transferred to the next department for January.3. Prepare a cost reconciliation for January.

Answer 1

1.units of Ending work in process

2,600 60% 1560 40% 1040 40% 1040

2.Cost of Ending WIP (Equivalent unit * Cost per equivalent unit) $22,464 $4,680 $8,216 $35,360

3.Cost of Units transferred (Equivalent units* Cost per equivalent unit) $365,760 $114,300 $200,660 $680,720

4.Total cost accounted for $716,080

Step-by-step explanation:

Superior Micro Products

1.

Equivalent units of production (EUP) in the Ending work in process - Weighted Average method

Units %Material EUP-Material % Labor EUP- Labor % Overhead EUP- Overhead

units of Ending work in process

2,600 60% 1560 40% 1040 40% 1040

3.

Computation of Ending Work in process inventory

Materials Labor Overhead Total for January

Equivalent units 1560 1040 1040

Cost per equivalent unit$14.40 $4.50 $7.90

Cost of Ending WIP (Equivalent unit * Cost per equivalent unit)$22,464 $4,680 $8,216 $35,360

3

Computation of Cost of the units transferred

Materials Labor Overhead Total for January

Equivalent units (25400*100%) 25400 25400 25400

Cost per equivalent unit $14.40 $4.50 $7.90

Cost of Units transferred (Equivalent units* Cost per equivalent unit) $365,760 $114,300 $200,660 $680,720

4.

Cost Reconciliation Report

Particulars Amount

Costs to be accounted for $716,080

Costs accounted for as follows:

Cost of unit transferred out $680,720

Cost of Ending Work in process inventory $35,360

Total cost accounted for $716,080