# Answered Essay: e production department had \$700,000 of direct materials and \$600,000 of direct labor cost cha

 During April, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of these transferred units, 54,000 were in process in the production department at the beginning of April and 290,000 were started and completed in April. April’s beginning inventory units were 70% complete with respect to materials and 30% complete with respect to labor. At the end of April, 70,000 additional units were in process in the production department and were 60% complete with respect to materials and 20% complete with respect to labor. The production department had \$700,000 of direct materials and \$600,000 of direct labor cost charged to it during April. Also, its beginning inventory included \$90,000 of direct materials cost and \$30,000 of direct labor.

 1&2. Using the weighted-average method, compute the direct materials cost and the direct labor cost per equivalent unit and assign April’s costs to the department’s output. (Round “Cost per EUP” to 2 decimal places.)

Equivalent units of production (EUP)- weighted average method Units % Materials EUP-Materials 344,000 42,000 386,000 % Labor EUP- Labor 100% 20% 100% 344,000 70,000 414,000 nits completed and transferred out 344,000 14,000 358,000 60% nits of ending goods in process Equivalent units of production Cost per equivalent unit of production Costs of beginning goods in process Costs incurred this period Total costs ÷ Equivalent units of production Cost per equivalent unit of production (rounded to 2 decimals) Total costs to account for: Materials Labor 90,000 700,000 S 790,000 386,000 2.05 30,000 600,000 S 630,000 358,000 1.76 EUP EUP irect labor – prior period irect materials – current period 0.00 Total costs to account for Total costs accounted for Difference due to rounding cost/unit Cost Assignment and Reconciliation Cost of units transferred out 0.00 EUP Cost per EUP Total cost Direct materials Direct labor Total costs transferred out Costs of ending goods in process EUP Cost per EUP Total cost Direct materials 0.00 0.00

Solution:

Equivalent units and cost per equivalent units are correct. Rest of the solution as follows:

 Total cost to account for: Direct material – prior period \$90,000 Direct labour – prior period \$30,000 Direct material – current period \$700,000 Direct labour – current period \$600,000 Total costs to account for \$ 1,420,000 Total costs accounted for \$ 1,421,380 Difference due to rounding cost/unit \$ 1,380

Cost assignment and reconciliation:

 Cost of units transferred out EUP cost per EUP total cost Direct material 344,000 \$2.05 \$705,200 Direct labour 344,000 \$1.76 \$605,440 Total costs transferred out \$1,310,640 Costs of ending work in process: Direct material 42000 \$2.05 \$86,100 Direct labour 14,000 \$1.76 \$24,640 Total ending goods in process \$110,740 Total costs accounted for \$1,421,380
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