Question

Data concerning a recent period’s activity in the Prep Department, the first processing department in a company that uses process costing, appear below: Materials Conversion Equivalent units in ending work in process inventory 2,160 960 Cost per equivalent unit $ 15.56 $ 5.53 A total of 20,600 units were completed and transferred to the next processing department during the period. Required: 1. Compute the cost of ending work in process inventory for materials, conversion, and in total. 2. Compute the cost of the units completed and transferred out for materials, conversion, and in total.

Answer 1

(1) $33,696, $5,308.8, $39,004.8

(2) $321,360, $113,918, $435,278

Step-by-step explanation:

(1) The cost of ending work in process inventory for materials, conversion and in total can be calculated as follows

Materials:

2160 × 15.6

= $33,696

Conversion:

960 × 5.53

= $5,308.8

Total:

$5,308.8 + $33,696

= $39,004.8

(2) The cost of units completed and transferred out for materials, conversion and total can be calculated as follows

Materials:

20,600 × 15.6

= $321,360

Conversion:

20,600 × 5.53

= $113,918

Total:

$20,600 × 21.13

= $435,278