S5-12 Assign total costs in a second processing department

(Learning Objective 5)

After completing Steps 1–4 of the process costing procedure, Donahue Corporation arrived at the following equivalent units and costs per equivalent unit for its final production department for the month of July:

1. How much cost should be assigned to the

a. units completed and transferred out to Finished Goods Inventory during July?

b. partially complete units still in ending work in process inventory at the end of July?
2. What was the “Total cost accounted for” during July? What other important figure must this match? What does this figure tell you?
3. What is Donahue Corporation’s average cost of making each unit of its product from the first production department all the way through the final production department?

12 3 Units completed and transferred out during July 4 Plus: Ending work in process, July 31 5 Total equivalent units 6 7 Cost per equivalent unit Transferred- in 69,000 Equivalent Units Direct Materials Conversion Costs 69,000 69,000 9,000 78,000 8,400 4,400 77,400 73,400 $ 2.84 $ 0.75 S 1.56