Asked by Maria Rodarte on May 10, 2024
Verified
On March 1, Upton Company's Packaging Department had work in process inventory of 8,820 units, which had been transferred in from the Finishing Department. These units had accumulated costs of $315,000 in previous departments and $16,000 for conversion costs in the Packaging Department.During March, 30,000 units were transferred into the department. These units had accumulated costs of $770,000 in the previous departments. The Packaging Department incurred $54,000 in conversion costs during the month. On March 31, 700 units remained in ending inventory. These units were 80% complete with respect to conversion costs.Calculate the cost per equivalent unit for transferred-in costs and for conversion costs for the Packaging Department using the average cost method. Rounded to the nearest cent.
Transferred-In Costs
Costs that are moved from one department or process to another within a company during the production process.
Conversion Costs
The combined costs of direct labor and manufacturing overheads incurred to convert raw materials into finished products.
- Determine the cost per equivalent unit by applying the average cost technique.
- Gain an understanding of determining and utilizing the overhead costs in manufacturing.
Verified Answer
DM
Dlamuka MinenhleMay 15, 2024
Final Answer :
Units transferred out = 8,820 + 30,000 - 700 = 38,120Transferred-in costs =
($315,000 + $770,000)/
(38,120 + 700) = $27.95 per equivalent unitConversion costs =
($16,000 + $54,000)/
(38,120 + 560) = $1.81 per equivalent unit
($315,000 + $770,000)/
(38,120 + 700) = $27.95 per equivalent unitConversion costs =
($16,000 + $54,000)/
(38,120 + 560) = $1.81 per equivalent unit
Learning Objectives
- Determine the cost per equivalent unit by applying the average cost technique.
- Gain an understanding of determining and utilizing the overhead costs in manufacturing.
Related questions
A Firm Produces Its Products by a Continuous Process Involving ...
Fast-Flow Paints Produces Mixer Base Paint Through a Two-Stage Process ...
The Inventory at June 1 and Costs Charged to Work ...
Eagle Co Manufactures Bentwood Chairs and Tables ...
Zang Co Manufactures Its Products in a Continuous Process Involving ...