Question

Fedora, Inc, uses a weighted average process-costing system and has one production department. All materials are introduced at the start of manufacturing, in contrast, conversion cost is incurred uniformly throughout production. The company had respective work-in-process inventories on May 1 and May 31 of 62,400 units and 72,000 units, the latter of which was 50% complete. The production supervisor noted that Fedora completed 104,000 units during the month. Costs in the May 1 work-in-process inventory were subdivided as follows: materials, $42,000; conversion, $94,000. During May, Fedora charged production with $380,400 of material and $750,000 of conversion, resulting in a material cost per equivalent unit of $2.40. Required: A. Determine the number of units that Fedora started during May. B. Compute the number of equivalent units with respect to conversion cost. C. Determine the conversion cost per equivalent unit. (Round your final answers to two decimal places.) D. Compute the cost of the May 31 work-in-process inventory. (Round your intermediate calculations to 2 decimal places and final answers to nearest whole dollar.) E. What account would have been credited to record Fedora's completed production? A. Number of units B. Number of equivalent units C. Conversion cost per equivalent unit D. Cost of work-in-process inventory E. Which record would have been credited

Answer 1

Answer:

Started                            113,600

EU conversion               140,000

Conversion cost per unit 6,028

Ending WIP    383.850‬

We credit WIP inventory this, is the origin of the cost then; we debit finished good to represent the complete goods destination

Explanation:

transferred                 104,000

Beginning                (62,400)  

Started and completed   41,600

Ending WIP                     72,000    

Started                            113,600

104,000 transferred + 72,000 x 50% = 140,000

EU conversion cost:

(94,000 + 750,000) / 140,000 = 6,028

Ending WIP

2.40 x 70,000 =  $172,800.00 materials

6.03 x 70,000 x 50% =  $ 211.050 conversion

    total $ 383.850‬