Badgersize Company has the following information for its Forming Department for the month of August: Work in
Question:
Badgersize Company has the following information for its Forming Department for the month of August:
Work in Process Inventory, August 1: 20,000 units
Direct materials: 100% complete . . . . . . . . . . . . . . . . . . . . . . . $ 80,000
Conversion: 20% complete . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,000
Balance in work in process, August 1 . . . . . . . . . . . . . . . . . . . . $104,000
Units started during August . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000
Units completed and transferred in August . . . . . . . . . . . . . . . 60,000
Work in process (70% complete), August 31 . . . . . . . . . . . . . . ?
Costs charged to Work in Process in August
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $150,000
Conversion costs:
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ..... $120,000
Overhead applied . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132,000
Total conversion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... $252,000
Assume materials are added at the start of processing.
Instructions
a. Calculate the equivalent units for the Forming Department for the month of August.
b. Find the cost per equivalent unit of the transferred units.
Step by Step Answer:
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello