In its first months operations (January 2016), Allred Companys Department 1 incurred charges of ($120,000) for direct

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In its first month’s operations (January 2016), Allred Company’s Department 1 incurred charges of \($120,000\) for direct materials (10,000 units), \($33,000\) for direct labor, and \($58,000\) for manufacturing overhead. At month end, 8,800 units had been finished and transferred out. The remaining units were finished with respect to material but only 25% complete with respect to conversion costs.

Assuming Allred uses the weighted average method and that materials are added at the beginning of the process and conversion costs occur evenly, compute the following:

a. The equivalent units of materials and conversion costs.

b. The cost per equivalent unit of materials and conversion costs.

c. The total cost assigned to the units transferred out.

d. The total cost assigned to the ending inventory.

e. Prove that your solutions to requirements (c) and (d) sum to the total costs to be accounted for

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Managerial Accounting For Undergraduates

ISBN: 9781618531124

1st Edition

Authors: Christensen, Theodore E. Hobson, L. Scott Wallace, James S.

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