Beginning Work in Process Inventory: 175 $4,000 $325 Materials: 30% complete Conversion: 20% complete Production started during June 400 $20,000 $15,400 Production completed during June ? Ending Work in Process Inventory: 125 Materials: 40% complete Conversion: 10% complete 2 Materials Conversion A $46 $30 B $48 $30 C $46 $34 D $48 $34 E None of the above 3 Calculate the cost of units transferred out to the next department. A $ 15,300 B $ 21,600 C $ 36,900 D $ 34,050 E None of the above How much is the cost of equivalent unit for Materials and Conversion? (Choose the closest answer.)

450 units and 450 units

D $48 $34

C $36,900

Explanation:

The computation is shown below:

a. For Production completed during June is

Before computing it first we have to determine the units completed and transferred out which is

= Beginning work in process units + production started units - ending work in process units

= 175 units + 400 units - 125 units

= 450 units

Now the equivalent units of production is

Particulars                                                Material                  Conversion

Units completed & transferred out        450 units           450 units  

+ Ending equivalent units

(Ending work in process units × percentage completion)  50 units    13 units

So,                                                              

Equivalent units of production            500 units          463 units

b. Now the cost of equivalent units for material and conversion cost is

Particulars                              Materials           Conversion

Beginning work in process cost          $4,000                   $325  

+ Cost added                                          $20,000           $15,400  

Total cost                                         $24,000                   $15,725  

Divide it Equivalent units of

production                                         500units                   463 units  

Cost of equivalent unit                         $48                            $34

c. The cost of units transferred out is

Particulars                                    Materials              Conversion  

Units completed

and transferred out                 450units             450 units  

Multiplied by cost of

equivalent unit                              $48                      $34  

Cost of units transferred out

to next department                 $21,600    +           $15,300 = $36,900

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