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Cost Accounting Assignment

The manufacturing department incurred $22,500 in materials costs, $45,625 in labor costs, and $50,000 in manufacturing overhead costs during the month. 40,000 units were completed and transferred out while 10,000 units remained in ending inventory. There were 45,000 equivalent units of material and 42,500 equivalent units of conversion costs. The process cost summary shows the unit costs were $0.50 per material unit and $2.25 per conversion unit, with an equivalent unit cost of $2.75. The cost of units transferred was $110,000 and the cost of ending inventory was $8,125.

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125 views5 pages

Cost Accounting Assignment

The manufacturing department incurred $22,500 in materials costs, $45,625 in labor costs, and $50,000 in manufacturing overhead costs during the month. 40,000 units were completed and transferred out while 10,000 units remained in ending inventory. There were 45,000 equivalent units of material and 42,500 equivalent units of conversion costs. The process cost summary shows the unit costs were $0.50 per material unit and $2.25 per conversion unit, with an equivalent unit cost of $2.75. The cost of units transferred was $110,000 and the cost of ending inventory was $8,125.

Uploaded by

Ali Puri
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2-During March, the following costs were charged to the manufacturing department: $22,500 for

materials; $45,625 for labor; and $50,000 for manufacturing overhead. The records show that
40,000 units were completed and transferred, while 10,000 remained in ending inventory. There
were 45,000 equivalent units of material and 42,500 units of conversion costs. Prepare the
company’s process cost summary for the month.
1 - Total Material Cost = $22,500
2 -Total Conversion cost = Labor+FOH
= 45,625+50,000
= $95,625
3 -Units transferred out = 40,000
4 -Ending Inventory = 10,000
5 -Equivalent units of material = 45,000
6 -Equivalent units of conversion costs = 42,500
7 -Equivalent cost per unit of material = Total Material Cost / Equivalent units of material
= 22500/45000
= $0.5
8 -Equivalent cost per unit of conversion costs = Total Conversion cost/ Equivalent units of
conversion
=95625/42500
=$ 2.25
9 -Equivalent cost per unit = 0.5+2.25
=$2.75
10 -Cost of inventory transferred = Units transferred*Equivalent cost per unit
= 40000*2.75
= $ 110,000
11 -Cost Of Ending Inventory = (42500-40000)*2.25 + (45000-40000)*0.5
=$ 8,125
1. Complete this production cost report: Ending inventory was 100% complete as to materials
and 70% complete as to conversion, and the total materials cost is $115,080 and the total
conversion cost is $72,072. Using the weighted-average method, what are the unit costs if the
company transferred out 34,000 units?
Beginning Inventory 1000
Started during the month 41000
Total units to account for 42000
Completed and Transferred out 34000
Ending work In Process 8000
Total Units accounted for 42000
Work in process completion 100% 70%

Material units Conversion units Total


Completed and transferred out 34000 34000 34000
Ending work in process 8000 5600 8000
Total units accounted for 42000 39600 42000

Costs to account for Material Conversion Total


Beginning work in process 1000 500 1500
Transferred in 0 0 0
Incurred during the period 115080 72072 187152
Total cost to account for 116080 72572 188652
Equivalent units 42000 39600 81600
Cost per equivalent unit 2.76 1.83 4.59

Transferred out cost 93840 62220 156060


End work in process materials 22080
End work in process conversion 10248
End work in process total 32328
Cost to account for 188388

Now the unit cost if company transfer 34000 units


= 116080/34000+72572/34000
=3.414+2.13
=5.54

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