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Exercise 3-3 The ledger of American Company has the following work in process account. Work in Process-Painting 3,590 5/31 Transferred out? 5,160 2,530 5/1 Balance 5/31 Materials /31 Labor 5/31 Overhead 1,380 S/31 Balance Production records show that there were 400 units in the beginning inventory, 30% complete, 1,600 units started, and 1,700 units transferred out. The beginning work in process had materials cost of $2,040 and conversion costs of $1,550 The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process. Your answer is correct. How many units are in process at May 31? Work in process, May 31 300 units Your answer is incorrect. Try again What is the unit materials cost for May? (Round unit cost to 3 decimal places, e.g. 2.257. The unit materials cost for May 3.225 Your answer is incorrect. Try again What is the unit conversion cost for May? (Round unit cost to 3 decimal places, e.g. 2.257.) The unit conversion cost for May 2.047 XYour answer is incorrect. Try again What is the total cost of units transferred out in May? (Round anwer to 0 decimal places, e.g. 1,225.) The total cost of units transferred out in May 8962 Your answer is incorrect. Try again What is the cost of the May 31 inventory? (Round answer to o decimal places, e.g. 1,225.) Work in process 1214
Expert Answer
| 1) | Work in process, May 31 | 300 | Units | ||||||||
| Working: | |||||||||||
| Beginning Inventory | 400 | ||||||||||
| Add:Units started | 1600 | ||||||||||
| Less:Units transferred out | 1700 | ||||||||||
| Work in process, May 31 | 300 | ||||||||||
| 2) | The unit material cost for May | $ 3.956 | |||||||||
| 3) | The unit conversion cost for May | $ 3.000 | |||||||||
| Working: | |||||||||||
| a. | Equivalent units | Materials | Conversions | ||||||||
| Physical Units | % of completion | Equivalent Units | % of completion | Equivalent Units | |||||||
| Units completed | 1700 | 100% | 1700 | 100% | 1700 | ||||||
| Ending Work in process | 300 | 40% | 120 | 40% | 120 | ||||||
| Equivalent units | 1820 | 1820 | |||||||||
| b. | Cost per equivalent units | Materials | Conversions | Total | |||||||
| Beginning work in process cost | $ 2,040.00 | $ 1,550.00 | $ 3,590.00 | ||||||||
| Cost added during for May | $ 5,160.00 | $ 3,910.00 | $ 9,070.00 | ||||||||
| (2530+1380) | |||||||||||
| Total costs | $ 7,200.00 | $ 5,460.00 | $ 12,660.00 | ||||||||
| Equivalent units | 1,820.00 | 1,820.00 | |||||||||
| Cost per equivalent units | $ 3.956 | $ 3.000 | $ 6.956 | ||||||||
| 4) | Total cost of units transferred out in May | $ 11,825 | |||||||||
| 5) | Work in process | $ 835 | |||||||||
| Workig: | |||||||||||
| a. | Total cost of units transferred out in May | ||||||||||
| Total cost of units transferred out in May | = | Equivalent units X cost per equivalent units | |||||||||
| = | 1700 | x | $ 6.96 | ||||||||
| = | $ 11,825 | ||||||||||
| b. | Work in process | ||||||||||
| Material cost | = | Equivalent units x Cost per equivalent unit | = | 120 | x | $ 3.96 | = | $ 475 | |||
| Conversion cost | = | Equivalent units x Cost per equivalent unit | = | 120 | x | $ 3.00 | = | $ 360 | |||
| Total | $ 835 | ||||||||||
| Note:Weighted Average method has been used here. | |||||||||||
