E5-30A Compute equivalent units and assign costs

(Learning Objectives 2, 3, & 4)

The Assembly Department of Greaton Surge Protectors began September with no work in process inventory. During the month, production that cost $50,786 (direct materials,

$12,386, and conversion costs, $38,400) was started on 27,000 units. Greaton completed and transferred to the Testing Department a total of 20,000 units. The ending work in process inventory was 36% complete as to direct materials and 80% complete as to conversion work.Requirements 1. Draw a time line.

2. Summarize the physical flow of units and compute total equivalent units for direct materials and for conversion costs.

3. Summarize total costs to account for and find the cost per equivalent unit for direct materials and conversion costs.

4. Assign total costs to units (gallons):

a. Completed and transferred out to the Packaging Department

b. In the Blending Department ending work in process inventory 5. What is the average cost per gallon transferred out of the Blending Department to the Packaging Department? Why would the company’s managers want to know this cost?