Superior Micro Products uses the weightedaverage method in i

Superior Micro Products uses the weighted-average method in its process costing system. During January the Delta Assembly Department completed its processing of 25,000 units and transferred them to the next department. The cost of beginning inventory and the costs added during January amounted to $599,780 in total. The ending inventory in January consisted of 3,000 units, which were 80% complete with respect to materials and 60% complete with respect to labor and overhead. The costs per equivalent unit for the month were as follows Materials 12.50 Labor S 3.20 Overhead $ 6.40 Cost per equivalent unit Required 1. Compute the equivalent units of materials, labor, and overhead in the ending inventory for the month. Materials Labor Overhead Equivalent units of production 2. Compute the cost of ending inventory and of the units transferred to the next department for January. Total Cost of ending work in process inventony Cost of units completed and transferred out 3. Prepare a cost reconciliation for January. (Note: You will not be able to break the cost to be accounted for into the cost of beginning inventory and costs added during the month.) Cost Reconciliation Total cost to be accounted for Costs accounted for as follows Total cost accounted for

Solution

Equivalent Units: Material Cost Labour & OH % Completion Units % Completion Units Units started and completed 100% 25,000 100% 25,000 Ending Work in Process 80% 2,400 60% 1,800 Total Equivalent units 27,400 26,800 TOTAL COST ACCOUNTED FOR: Units started and Transferred out (25000 units) Equivalent unit Cost per EU Total Cost Material 25,000 12.5 312500 Conversion Cost 25,000 9.6 240000 Total Cost of Units completed and transferred out: 552500 Ending Work in process (3,000 units) Equivalent unit Cost per EU Total Cost Material 2,400 12.5 30000 Conversison Cost 1,800 9.6 17280 Total cost of Ending Work in process: 47,280 Req 1. Material Labour OH Equivalent units 27400 26800 26800 Req 2: Cost of Ending WIP 47280 Costt of Units transferred out 552500 Req 3: Total cost to be accounted for 599780 Cost accounted for: Cost of Ending WIP 47280 Costt of Units transferred out 552500 Total cost accounted for 599780