
Concept explainers
The Cost perequivalent unit for each element of cost

Answer to Problem 13P
Solution: The statement showing the cost per equivalent unit for element is as under:
Equivalent Units: | ||||||||
Transferred in Cost | Material Cost | Conversion Cost | ||||||
% Completion | Units | % Completion | Units | % Completion | Units | |||
Units completed and transferred
Ending Work in Process Total Equivalent units |
100%
100% |
50.00
1.00 |
100%
80% |
50.00
0.80 |
100%
70% |
50.00
0.70 |
||
51 | 50.8 | 50.7 | ||||||
Explanation of Solution
The total cost of Transferred-in cost shall be the sum total of transferred in cost included in beginning work in process and added during the current period. The transferred-in cost per equivalent units shall be computed by dividing the total transferred-in cost by equivalent units of respective cost.
Requirement3:
The Cost of Ending work in process inventory in respect of material, conversion and in total

Answer to Problem 13P
Solution: The statement showing the cost of ending work in process is as under:
Ending Work in Process (1 unit)
|
Equivalent unit | Cost per EU | Total Cost | |||||
Transferred-in cost | 1.00 | 1630 | 1630 | |||||
Material cost | 0.80 | 120 | 96 | |||||
Conversion Cost | 0.70 | 850 | 595 | |||||
Total cost of Ending Work in process: | 2,321 |
Explanation of Solution
The total cost of ending work in process shall be computed by multiplying the equivalent units of each element in ending work in
Requirement4:
The Cost of goods completed and transferred out

Answer to Problem 13P
Solution: The statement showing the cost of units completed and transferred out shall be as under:
Units Completed and Transferred out (50 units)
|
Equivalent unit | Cost per EU | Total Cost | ||||
Transferred-in cost | 50 | 1630 | 81500 | ||||
Material cost | 50 | 120 | 6000 | ||||
Conversion Cost | 50 | 850 | 42500 | ||||
Total Cost of Units completed and transferred out: | 130000 |
Explanation of Solution
The total cost of units completed and transferred out shall be computed by multiplying the equivalent units of each element in units completed (which is equal to completed units only) by cost per equivalent unit of respective element. The Summation of each element cost is the total cost of ending work in process.
Requirement5:
To show: The

Answer to Problem 13P
Solution: The reconciliation statement showing the cost to account for and accounted in ending work in process and completed units is as follows:
RECONCILIATION STATEMENT | |||||||
TOTAL COST TO ACCOUNT FOR:
|
|||||||
Transferred-in | Material | Conversion | |||||
Beginning work in Process | 1,670 | 90 | 605 | ||||
Cost Added during May | 81,460 | 6,006 | 42,490 | ||||
Total Cost to account for: | 83,130 | 6,096 | 43,095 | ||||
Total Cost to account for: | 132,321 | ||||||
TOTAL COST ACCOUNTED FOR:
|
|||||||
Units Completed and Transferred out (50 units)
|
|||||||
Equivalent unit | Cost per EU | Total Cost | |||||
Transferred-in cost | 50 | 1630 | 81500 | ||||
Material cost | 50 | 120 | 6000 | ||||
Conversion Cost | 50 | 850 | 42500 | ||||
Total Cost of Units completed and transferred out: | 130000 | ||||||
Ending Work in Process (1 unit)
|
|||||||
Equivalent unit | Cost per EU | Total Cost | |||||
Transferred-in cost | 1.00 | 1630 | 1630 | ||||
Material cost | 0.80 | 120 | 96 | ||||
Conversion Cost | 0.70 | 850 | 595 | ||||
Total cost of Ending Work in process: | 2,321 | ||||||
Total Cost accounted for: | 132,321 | ||||||
Difference (Total cost to account for-Total cost accounted) | Nil |
Explanation of Solution
The total cost to account for is the total cost of beginning work in process and cost added during the period in the process. The total cost accounted for is the cost assigned to ending work in process and units completed and transferred out.
The reconciliation means there shall be not be any difference between the total cost to account for and total accounted in the period.
To conclude, it must be said that the equivalent units in each inventory shall multiplied with respective cost per equivalent unit and cost of each element is added up to arrive at the total cost of ending work in process and completed units.
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Chapter 4 Solutions
Connect 1-Semester Access Card for Managerial Accounting
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