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 2,080 930
Cost per equivalent unit $15.66 $6.23

A total of 21,700 units were completed and transferred to the next processing department during the period.

Required:
a. Compute the cost of ending work in process inventory for materials, conversion, and in total.
b. Compute the cost of the units completed and transferred out for materials, conversion, and in total.

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andromache andromache · Answer 1 · 2020-10-02T16:45:36+02:00

Answer and Explanation:

a. The computation of cost of ending work in process inventory for materials, conversion, and in total is shown below:-

For material = 2,080 × $15.66

= $32,572.80

For conversion = 930 × $6.23

= $5,793.90

For total cost of work in process inventory = $32,572.80 + $5,793.90

= $38,366.70

b. The computation of cost of the units completed and transferred out for materials, conversion, and in total is shown below:-

For material = 21,700 × $15.66

= $339,822

For Conversion = 21,700 × $6.23

= $135,191

For total cost of completed and transferred units = $339,822 + $135,191

= $475,013