Waterway's is a brand of lotion created specifically for sensitive skin. The company, which goes by the same name, manufactures in small batches so the lotion retains its special qualities. The batch in process on December 31 included 100 units, determined to be 60% complete as to conversion costs. DM costs had already been added, as all DM is added at the very beginning of processing. During January, Waterway's started another 2,000 units, and by January 31, 2,000 units were completed, leaving 100 units still in process. Units in ending WIP Inventory were 50% complete for conversion costs. The following costs existed or were added to the WIP Inventory account in January. Total Costs DM Conversion Costs Costs in beginning WIP Inventory (from last period) $760 $325 $435 Costs added to WIP Inventory this period 4,385 1,400 2,985 Total costs to account for $5,145 $1,725 $3,420 (a) Your answer is correct. Assuming Waterway's uses the FIFO method of process costing, complete Steps 1 and 2 of the template to determine the equivalent units of work done during January. ды) Total equivalent units of work done this period DM Conversion Cost 2000 1990 Complete Steps 3-5 of the template to determine the cost per equivalent unit and to assign DM costs and conversion costs to the physical units of the period. Carefully label the total cost of units completed. (Round cost per equivalent unit answers to 2 decimal places, e.g. 15.25.)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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Transcribed Image Text:Waterway's is a brand of lotion created specifically for sensitive skin. The company, which goes by the same name, manufactures in small batches so the lotion retains its special qualities. The batch in process on December 31 included 100 units, determined to be 60% complete as to conversion costs. DM costs had already been added, as all DM is added at the very beginning of processing. During January, Waterway's started another 2,000 units, and by January 31, 2,000 units were completed, leaving 100 units still in process. Units in ending WIP Inventory were 50% complete for conversion costs. The following costs existed or were added to the WIP Inventory account in January. Total Costs DM Conversion Costs Costs in beginning WIP Inventory (from last period) $760 $325 $435 Costs added to WIP Inventory this period 4,385 1,400 2,985 Total costs to account for $5,145 $1,725 $3,420 (a) (b) Your answer is correct. Assuming Waterway's uses the FIFO method of process costing, complete Steps 1 and 2 of the template to determine the equivalent units of work done during January. Total equivalent units of work done this period DM 2000 Conversion Cost 1990 Complete Steps 3-5 of the template to determine the cost per equivalent unit and to assign DM costs and conversion costs to the physical units of the period. Carefully label the total cost of units completed. (Round cost per equivalent unit answers to 2 decimal places, e.g. 15.25.) Cost per equivalent unit $ DM 0.7 $ Total cost of units completed $ Cost of units in ending inventory $ 900 Conversion Cost 1.5

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