Question

Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,292,384 as follows. Work in process, November 1 Materials $78,900 Conversion costs 48,300 $127,200 Materials added 1,598,460 Labor 225,200 Overhead 341,524 Production records show that 35,200 units were in beginning work in process 30% complete as to conversion costs, 663,700 units were started into production, and 25,900 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.Required:a. Determine the equivalent units of production and the unit production costs for the Assembly Department.b. Determine the assignment of costs to goods transferred out and in process.c. Prepare a production cost report for the assembly dept.

Answer 1

Rivera Company

a1) Equivalent Unit

Materials Conversion

Started & completed 673,000 673,000

WIP 25,900 10,360

Equivalent Units 698,900 683,360

a2) Cost per equivalent unit:

Materials Conversion Total Costs

Costs added $1,598,460 $566,724

Beginning WIP 78,900 48,300

Total costs $1,677,360 $615,024

Equivalent Units 698,900 683,360

Costs per equivalent $2.4 $0.90 $3.30

Costs attributable:

Materials Conversion Total Costs

Started and completed $1,615,200 $605,700 $2,220,900

WIP, November 30 62,160 9,324 71,484

Total costs $1,677,360 $615,024 $2,292,384

c. RIVERA COMPANY

Assembly Department

Production Cost Report

For the month ended November 30,2020

Equivalent units

Quantities Physical Unit Materials Conversion Costs

Units to be accounted for:

Work in process, November 1 35,200

Started into production 663,700

Total units 698,900

Units accounted for:

Transferred out 673,000 673,000 673,000

Work in process, Nov. 30 25,900 25,900 10,360

Total units 698,900 698,900 683,360

Costs Materials Conversion Costs Total

Unit costs

Total costs $1,677,360 $615,024 $2,292,384

÷ Equivalent units 698,900 683,360

= Unit costs $2.40 $0.90 $3.30

Costs to be accounted for:

Work in process, November 1 $127,200

Started into production $2,165,184

Total costs $2,292,384

Cost reconciliation Schedule

Cost s accounted for:

Transferred out $2,220,900

Work in process, November 30

Materials $62,160

conversion costs $9,324

Total costs $2,292,384

Step-by-step explanation:

a) Data and Calculations:

Total Assembly Department costs = $2,292,384

WIP, November 1:

Materials $78,900

Conversion costs 48,300

Total $127,200

Materials added 1,598,460

Labor 225,200

Overhead 341,524

Units in production:

WIP, November 1 = 35,200

Completion 30% Conversion

Started = 663,700

Ending WIP 25,900

Completion = 40% conversion

b) The equivalent unit of production is the percentage of completion that has been achieved for each stage of the process. It is calculated by applying the percent of work done on the units of production. This is then used to determine the costs per equivalent unit and the costs to be attributable to the ending work in process and the units that have been completed.