The costs per equivalent unit of direct materials and conversion in the Rolling Department of Keystone Steel Company are $60 and $10, respectively. The equivalent units to be assigned costs are as follows:
Equivalent Units
Direct Materials | Conversion
Inventory in process, beginning of period 0 | 320
Started and completed during the period 7,500 | 7,500
Transferred out of Rolling (completed) 7,500 | 7,820
Inventory in process, end of period 1,000 | 300
Total units to be assigned costs 8,500 | 8,120
The beginning work in process inventory had a cost of $25,000. Determine the cost of completed and transferred-out production and the ending work in process inventory.
Answer:
Direct
Materials Conversion Total
Costs Costs Costs
Inventoryin process, balance…………………………
Inventoryin process, beginning of period…………… 0 + 320 × $10 3,200
Cost of completed beginning work in process……… $ 28,200
Started and completed during the period…………… 7,500 × $60 + 7,500 × $10 525,000
Transferred out of Rolling (completed)……………… $553,200
Inventory in process, end of period…………………… 1,000 × $60 + 300 × $10 63,000
Total costs assigned by the Rolling Dept. …………… $616,200
Completed and transferred-out production………… $553,200
Inventory in process, ending…………………………… $63,000
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