PE 20-6B Cost of units transferred out and ending work in process

The costs per equivalent unit of direct materials and conversion in the Rolling Department of Keystone Steel Company are $60 and $10, respectively. The equivalent units to be assigned costs are as follows:
                                                                                   Equivalent Units
                                                                     Direct Materials | Conversion
Inventory in process, beginning of period                           0 |    320
Started and completed during the period                      7,500 |  7,500
Transferred out of Rolling (completed)                        7,500 |  7,820
Inventory in process, end of period                              1,000 |    300
Total units to be assigned costs                                     8,500 |  8,120


The beginning work in process inventory had a cost of $25,000. Determine the cost of completed and transferred-out production and the ending work in process inventory.


Answer:


Direct 
Materials Conversion Total 
Costs Costs Costs 
Inventoryin process, balance…………………………    
Inventoryin process, beginning of period…………… 0 + 320 × $10   3,200 
Cost of completed beginning work in process………    $ 28,200 
Started and completed during the period…………… 7,500 × $60 + 7,500 × $10   525,000 
Transferred out of Rolling (completed)………………    $553,200 
Inventory in process, end of period…………………… 1,000 × $60 + 300 × $10     63,000 
Total costs assigned by the Rolling Dept. ……………    $616,200 
Completed and transferred-out  production………… $553,200    
Inventory in process, ending…………………………… $63,000