ABC Company manufactures one type of door handle. The Assembly Department uses a process cost accounting system. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During August, $200,000 of materials costs and $95,000 in conversion costs was charged to the department. The beginning Work in Process inventory was $63,000 on August 1, comprised of $40,000 of materials costs and $23,000 of conversion costs.

Other data for the month of August are as follows:

Beginning Work in Process inventory, 8/1 25,000 units (40% complete)

Units completed and transferred out 50,000 units

Ending Work in Process inventory, 8/31 30,000 units (30% complete)

Instructions

Answer the following questions and show your calculations.

a) How many physical units have to be accounted for in August?

b) What are the equivalent units of production for materials and for conversion costs for the month of August?

c) What is the total cost assigned to the 50,000 units that were transferred out of the process in August?

d) What is the total cost of the August 31 work in process inventory?

e) Where does the item move to when it is completed in Work in Process?