1. Cost of beginning work in process inventory completed this period.
2. Cost of units transferred to finished goods during the period.
3. Cost of ending work in process inventory.
4. Cost per unit of the completed beginning work in process inventory, rounded to the nearest cent.
b. Did the production costs change from the preceding period? Explain.
c. Assuming that the direct materials cost per unit did not change from the preceding period, did the conversion costs per equivalent unit increase, decrease, or remain the same for the current period?
Answer:
a. 1. $29,470; determined as follows:
Beginning work in process balance…………………………………………… $ 22,450
Conversion costs incurred during period
(585 equivalent units × $12.00)……………………………………………… 7,020
Cost of beginning work in process completed during period…………… $ 29,470
2. Cost of beginning work in process…………………………………………… $ 29,470
Cost of units started and completed during period*……………………… 506,880
Cost of units transferred to finished goods during period……………… $536,350
* ($21.00 + $12.00) × 15,360 units
3. $16,896; determined as follows:
Direct materials ($21.00 × 640 units)………………………………………… $ 13,440
Conversion costs ($12.00 × 288 equivalent units)………………………… 3,456
Cost of ending work in process inventory…………………………………… $ 16,896
Note: The cost of the ending work in process is also the ending balance of
Work in Process—Assembly Department.
4. $32.74 rounded ($29,470 ÷ 900 units)
b. Yes. The production costs per unit increased during the current period. The
cost per unit of the units started and completed during the period is $33 ($21
+ $12). Since the cost per unit of the beginning work in process is
$32.74 [see part (4) above], the production costs during the current period
must have increased.
c. The conversion cost in the current period increased by $0.73 per equivalent
unit, determined as follows:
Beginning work in process………………………………………………………… $22,450
Deduct direct materials cost incurred in prior period
($21.00 × 900 units, cost per unit unchanged)………………………………… 18,900
Conversion costs incurred in prior period……………………………………… $ 3,550
Current-period conversion cost per equivalent unit…………………………… $12.00
Less prior-period conversion cost per equivalent unit
[$3,550 ÷ (900 units × $0.35)]……………………………………………………… 11.27
Increase in conversion cost per equivalent unit during
current period………………………………………………………………………… $ 0.73