# Managerial Accounting Homework 2

Topics: Costs, Units of measurement, Cost Pages: 3 (533 words) Published: February 17, 2012
Exercise 3-13. Costing Units Completed and Ending Work in Process [LO 2,3,4] At the start of November, Penco Refinery had Work in Process inventory consisting of 4,000 units that were 90 percent complete with respect to materials and 50 percent complete with respect to conversion costs. The cost of the units was \$38,000 (\$25,000 of material cost and \$13,000 of labor and overhead). During November, the company started 44,000 units and incurred \$421,970 of material cost and \$394,880 of labor and overhead. The company completed 45,000 units during the month, and 3,000 units were in process at the end of November. The units in ending Work in Process were 85 percent complete with respect to materials and 45 percent complete with respect to conversion costs.

a. Calculate the cost per equivalent unit for materials and conversion costs. b. Calculate the cost of items completed during November.
c. Calculate the cost of ending Work in Process.

a. Material:
Cost in beginning work in process\$ 25,000
Cost during the period\$ 421,970
\$ 446,970

Conversion cost:

Cost in beginning work in process\$ 13,000
Cost during the period\$ 394,880
= 407,880

Equivalent Units in ending work in process:
Material (4,000 units x .9)3,600
Conversion cost (4,000 x .5)2,000

Cost per equivalent unit of material:
\$446,970 divided by (44,000 + 3,600)\$ 9.39

Cost per equivalent unit for conversion cost:
\$407,880 divided by (44,000 + 2000)\$ 8.87
= \$ 18.26

b. Cost of items completed in November:
45,000 units x \$18.26\$ 821,700

c. Cost of ending work in process:
Material cost (3,600 x \$ 9.39)\$ 33,804
Conversion cost (2,000 x \$ 8.87)\$ 17,740
Total cost of ending work in process \$ 51,544

Exercise 3-14. Quantity Schedule and Equivalent Units [LO 2,3] Simon Fishing Co. processes salmon for various distributors. The two departments involved...