5#1

produces a lip balm used for cold-weather sports. The balm is manufactured in a single processing department. No lip balm was in process on

May

31,

and

Ruby

started production on

20,300

lip balm tubes during

June.

Direct materials are added at the beginning of the process, but conversion costs are incurred evenly throughout the process. Completed production for

June

totaled

15,800

units. The

June

30

work in process was

30%

of the way through the production process. Direct materials costing

$5,278

were placed in production during

June,

and direct labor of

$3,370

and manufacturing overhead of

$3,490

were assigned to the process. Read the requirements

LOADING...

.

Requirement 1. Fill in the time line for

Ruby Lips.

Conversion costs added evenly throughout the process
Start						30%	Complete	100%	Complete
Units transferred out									100% complete
15,800 units completed and transferred out
4,500 units incomplete

Requirement 2. Use the time line to help you compute the total equivalent units and the cost per equivalent unit for

June.

Ruby Lips
Lip Balm Department
Equivalent Unit Computation
Month Ended June 30
	Flow of	Equivalent Units
	Physical	Direct	Conversion
Flow of Production	Units	Materials	Costs
Units accounted for:
Total equivalent units

Compute the cost per equivalent unit. (For entries with a $0 balance, make sure to enter "0" in the appropriate cell(s). Enter the cost per equivalent unit to two decimal places.)

Ruby Lips
Lip Balm Department
Cost per Equivalent Unit
Month Ended June 30
	Direct	Conversion
	Materials	Costs
Cost per equivalent unit

Requirement 3. Assign total costs to (a) units completed and transferred to Finished Goods and (b) units still in process at

June

30.

(Enter quantities first, then the cost per equivalent unit amounts in the same order as calculated in the preceding step.)

Lip Balm Department
Month Ended June 30
Assigning Costs
		Direct	Conversion
		Materials	Costs	Total
a.	Completed and transferred out:
b.	Ending work in process:
	Total costs accounted for

Requirement 4. Prepare a T-account for Work in Process Inventory to show activity during

June,

including the

June

30

balance. (For entries with a $0 balance, make sure to enter "0" in the appropriate cell.)

Work in Process Inventory