Asked by Mike Tyson Bing Bong on Jun 07, 2024
Verified
The inventory at June 1 and costs charged to Work in Process-Department 60 during June are as follows: During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on June 1. On June 30, the inventory of work in process consisted of 4,600 units that were 40% completed. Inventories are costed by the average cost method, and all materials are added at the beginning of the process.Determine the following, presenting your computations:
(a)Equivalent units of production for conversion cost
(b)Conversion cost per equivalent unit and material cost per equivalent unit
(rounded to the nearest cent)
(c)Total and unit cost of finished goods completed in the current period
(d)Total cost of work in process inventory at June 30
Equivalent Units
A concept used in process costing that converts partially completed units into a number of fully completed units, facilitating the calculation of costs per unit.
Conversion Cost
The combined costs of direct labor and manufacturing overheads that are incurred to convert raw materials into finished products.
Average Cost Method
An inventory valuation method that assigns an average cost to each item in stock, used to determine the cost of goods sold.
- Compute the cost per equivalent unit using the average cost method.
- Prepare costing reports for production departments under varying inventory costing methods.
Verified Answer
Learning Objectives
- Compute the cost per equivalent unit using the average cost method.
- Prepare costing reports for production departments under varying inventory costing methods.
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