At the beginning of the month, the Painting Department of Skye Manufacturing had 40,000 units in inventory, 80% complete as to materials, and 25% complete as to conversion. The cost of the beginning inventory, $48,650, consisted of $42,400 of material costs and $6,250 of conversion costs. During the month the department started 135,000 units and transferred 150,000 units to the next manufacturing department. Costs added in the current month consisted of $329,600 of materials costs and $604,500 of conversion costs. At the end of the month, the department had 25,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.

Question

Koen Morse

Business

31 July, 08:11

At the beginning of the month, the Painting Department of Skye Manufacturing had 40,000 units in inventory, 80% complete as to materials, and 25% complete as to conversion. The cost of the beginning inventory, $48,650, consisted of $42,400 of material costs and $6,250 of conversion costs. During the month the department started 135,000 units and transferred 150,000 units to the next manufacturing department. Costs added in the current month consisted of $329,600 of materials costs and $604,500 of conversion costs. At the end of the month, the department had 25,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.

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Answers (1)

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Roderick Matthews · Answer 1

Material Cost per equivalent unit = $2.325

Conversion Cost per equivalent unit = $4.004

Explanation:

According to the scenario, computation of the given data are as follow:-

Particular Material cost Conversion cost

Completed and transferred out units 150,000 150,000

Work in process at the end of the month 10,000 2,500

Equivalent units per material 160,000 152,500

Cost incurred in the current month consisted $372,000 $610,750

Cost per equivalent unit $2.325 $4.004

Work in Process at the end of the Month Material Cost = Units * Percent

= 25,000 * 40:100 = 10,000

Work in process at the end of the month conversion cost = 25,000 * 10:100

= 2,500

Material Cost incurred = $329,600 + $42,400 = $372,000

Conversion Cost incurred = $604,500 + $6,250 = $610,750

Cost Per Equivalent Unit = Cost Incurred : Equivalent Unit

Material Cost per equivalent unit = 372,000 : 160,000

= $2.325

Conversion Cost per equivalent unit = 610,750 : 152,500

= $4.004