Question 2.

Process Cost Accounting (23 Marks)

The Polishing Department of Nina Company has the following production and manufacturing cost data for September. Materials are entered at the beginning of the process.

Production: Beginning inventory 3,000 units that are 100% complete as to materials and 40% complete as to conversion costs; units started during the period are 40,000, ending inventory of 4,000 units 35% complete as to conversion costs.

Manufacturing costs: Beginning inventory costs, comprised of $24,000 of materials and $15,000 of conversion costs; materials costs added in Polishing during the month, $320,000 labor and overhead applied in Polishing during the month $294,000 and $196,000 respectively.

Instructions

(a) Compute the equivalent units of productions for materials and conversion costs for the month of September.

(b) Compute the unit costs for materials and conversion costs for the month.

(c) Determine the costs to be assigned to the units transferred out and in process.