Appendix 2; standard process costing

MHR Inc. uses a standard process costing system. All material is added at the beginning of the production process. Per unit standard costs for one of the companys products are as follows:

Direct material	$	8.50
Direct labor	1.30
Overhead	4.95
Total standard cost	$	14.75

October 2013 production and cost information for MHR follow:

Units in beginning inventory (45% complete as to DL, 75% complete as to OH)	10,300
Units started	403,500
Units in ending inventory (65% complete as to DL, 85% complete as to OH)	4,700
Current period costs:
Direct material	$3,453,840
Direct labor	527,935
Overhead	2,005,482

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a. Prepare an equivalent units of production schedule. If an amount box does not require an entry, enter "0".

MHR Inc.
Equivalent units of production schedule
October 2013
Units	Material	Labor	Overhead
Beginning Inventory	Correct 9 of Item 1
Units started	Correct 11 of Item 1
Units to account for	Correct 13 of Item 1
Beginning Inventory Completed	Correct 15 of Item 1	Correct 16 of Item 1	Correct 17 of Item 1	Correct 18 of Item 1
Units S & C	Correct 20 of Item 1	Correct 21 of Item 1	Correct 22 of Item 1	Correct 23 of Item 1
Units Completed	Correct 25 of Item 1
Ending Inventory	Correct 27 of Item 1	Correct 28 of Item 1	Correct 29 of Item 1	Correct 30 of Item 1
Equivalent Unit Production	Correct 32 of Item 1	Correct 33 of Item 1	Correct 34 of Item 1	Correct 35 of Item 1

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b. Determine the cost of the beginning inventory (in total and by cost component). If needed, round your answer to the nearest cent.

$

c. Assign costs to goods transferred and to ending WIP inventory. If needed, round your answers to the nearest cent.

Goods transferred = $

Ending WIP Inventory = $

d. Calculate the following variances and indicate whether they are favorable or unfavorable. If needed, round your answers to the nearest cent.

Direct material	$	- Select your answer -FavorableUnfavorableCorrect 5 of Item 2
Direct labor	$	- Select your answer -FavorableUnfavorableCorrect 7 of Item 2
Overhead variances	$	- Select your answer -FavorableUnfavorableCorrect 9 of Item 2

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