Costs assigned to Units transferred and units in ending inventory: The costs are assigned to units transferred and units in ending inventory on the basis of equivalent units in materials and conversion and cost per units assigned. The costs assigned to units transferred are calculated as under – C o s t s a s s i g n e d t o u n i t s t r a n s f e r r e d = E q u i v a l e n t u n i t s o f m a t e r i a l s X C o s t p e r e q u i v a l e n t u n i t s + E q u i v a l e n t u n i t s o f c o n v e r s i o n X C o s t p e r e q u i v a l e n t u n i t s The costs assigned to ending inventory are calculated as under – C o s t s a s s i g n e d t o ending inventory = E q u i v a l e n t u n i t s o f m a t e r i a l s X C o s t p e r e q u i v a l e n t u n i t s + E q u i v a l e n t u n i t s o f c o n v e r s i o n X C o s t p e r e q u i v a l e n t u n i t s To assign: Costs to the roasting department’s output for – 1. Units transferred out 2. Units in ending inventory (units that remain n process in the roasting department at month-end)

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Chapter 20, Problem 22QS

To determine

Concept Introduction:

Costs assigned to Units transferred and units in ending inventory:

The costs are assigned to units transferred and units in ending inventory on the basis of equivalent units in materials and conversion and cost per units assigned.

The costs assigned to units transferred are calculated as under –

$\begin{array}{l} C o s t s a s s i g n e d t o u n i t s t r a n s f e r r e d = E q u i v a l e n t u n i t s o f m a t e r i a l s X C o s t p e r e q u i v a l e n t u n i t s \\ + E q u i v a l e n t u n i t s o f c o n v e r s i o n X C o s t p e r e q u i v a l e n t u n i t s \end{array}$

The costs assigned to ending inventory are calculated as under –

$\begin{array}{l} C o s t s a s s i g n e d t o ending inventory = E q u i v a l e n t u n i t s o f m a t e r i a l s X C o s t p e r e q u i v a l e n t u n i t s \\ + E q u i v a l e n t u n i t s o f c o n v e r s i o n X C o s t p e r e q u i v a l e n t u n i t s \end{array}$

To assign:

Costs to the roasting department’s output for –

1. Units transferred out

2. Units in ending inventory (units that remain n process in the roasting department at month-end)

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