PART IV $-$ Equivalent Units and Process Costing

Instructions: Using the following data, complete the requirements given below. When you are

given amounts to assume as the answers to previous requirements, be careful to use such

assumed amounts rather than your answers $($in order to minimize carry$-$through errors$).$

The Finishing Department of Lax Corporation reports the following for January $2012$:

Production: All materials are added at the beginning of the process. Beginning work in process

$20,000$ units, $60\%$ complete. Units started into production $250,000$ units. Ending work in process

$30,000$ units, $30\%$ complete.

Manufacturing Costs: Beginning work in process, $$45,000,$ comprised of $$17,000$ of materials and

$$28,000$ of conversion costs. Materials added $$313,000$; labor and overhead added $$522,000.$

$($a$)$ Required: Compute equivalent units of production for $(1)$ materials and $(2)$ conversion

costs.

$($b$)$ Assume your answers to $($a$)$ above were $300,000$ units for materials and $200,000$ for

conversion costs.

Required: Compute the unit costs for the month.

$($c$)$ Assume your answers to $($b$)$ above were $$\mathrm{.}90$ for materials and $$2\mathrm{.}00$ for conversion costs.

Required: Determine the costs to be assigned to the units transferred out.

$($d$)$ Assume the same unit costs as given in $($c$)$ above.

Required: Determine the costs assigned to the units in ending work in process.