Question

Rivera Company has several processing departments. Costs charged to the Assembly Department for November 2020 totaled $2,283,744 as follows.

Work in process, November 1
Materials $78,600
Conversion costs 48,700 $127,300
Materials added 1,592,280
Labor 225,100
Overhead 339,064
Production records show that 35,200 units were in beginning work in process 30% complete as to conversion costs, 661,000 units were started into production, and 25,400 units were in ending work in process 40% complete as to conversion costs. Materials are entered at the beginning of each process.
Determine the equivalent units of production and the unit production costs for the Assembly Department. (Round unit costs to 2 decimal places, e.g. 2.25.)

Answer 1

Equivalent units of Production for Materials.

= Units transferred out + Ending WIP

Units transferred out = Beginning WIP + Units started in production - Ending WIP

= 35,200 + 661,000 - 25,400

= 670,800 units

= 670,800 + 25,400

= 696,200 units

Equivalent units of Production for Conversion

= Units transferred out + Ending WIP Conversion

= 670,800 + (25,400 * 40%)

= 680,960 units

Units cost of production for Materials

= (Beginning material cost + Materials added) / Materials EUP

= (78,600 + 1,592,280) / 696,200

= $2.40

Units cost of production for Conversion

= (Beginning conversion + labor + overhead) / Conversion EUP

= (48,700 + 225,100 + 339,064) / 680,960

= $0.90