Edwards  manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection occurs when units are 60% converted. Normal spoilage, if any, generally constitute 4% of the good units - units that successfully passed the inspection in current month.  Company use Weighted Average method.   Data for May 2021 are as follows:   WIP, beginning inventory 5/1/2021                   24,200 units       Direct materials (100% complete)       Conversion costs (75% complete) Started during December                                    83,600 units Completed and transferred out 5/31/2021          79,200 units WIP, ending inventory 5/31/2021                       19,800 units       Direct materials (100% complete)       Conversion costs (65% complete)   Costs for December:       WIP, beginning Inventory:             Direct materials                                          $ 165,000             Conversion costs                                              84,480       Direct materials added                                         244,640       Conversion costs added                                       319,000   1. What is the equivalent units for direct materials for May? 2. What are the equivalent units for conversion costs for May? 3. Compute the direct materials cost per equivalent unit during May.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Edwards  manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection occurs when units are 60% converted. Normal spoilage, if any, generally constitute 4% of the good units - units that successfully passed the inspection in current month.  Company use Weighted Average method.
 
Data for May 2021 are as follows:
 
WIP, beginning inventory 5/1/2021                   24,200 units
      Direct materials (100% complete)
      Conversion costs (75% complete)
Started during December                                    83,600 units
Completed and transferred out 5/31/2021          79,200 units
WIP, ending inventory 5/31/2021                       19,800 units
      Direct materials (100% complete)
      Conversion costs (65% complete)
 
Costs for December:
      WIP, beginning Inventory:
            Direct materials                                          $ 165,000
            Conversion costs                                              84,480
      Direct materials added                                         244,640
      Conversion costs added                                       319,000
 
1. What is the equivalent units for direct materials for May?

2. What are the equivalent units for conversion costs for May?

3. Compute the direct materials cost per equivalent unit during May.

4. Compute the conversion cost per equivalent unit in May.

5. Compute total normal spoilage cost.

6. What is the cost of units completed and transferred out to Testing Department?

7. What amount of conversion costs is assigned to the ending Work-in-Process account for May?

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