Timing Technology, Incorporated, manufactures timing devices. During 20x1, 2,700,000 units were completed and transferred to finished-goods inventory. On December 31, 20x1, there were 440,000 units in work in process. These units were 45 percent complete as to conversion and 100 percent complete as to direct material. Finished-goods inventory consisted of 1,134,000 units. Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 100 percent of direct-labor costs. There was no finished-goods inventory on January 1, 20x1. A review of the inventory cost records disclosed the following information:     Units Direct Material (Costs) Direct Labor (Costs) Work in process, January 1, 20x1 (82% complete as to conversion) 430,000 $ 334,000 $ 327,400 Units started in production 2,710,000     Direct-material costs   $ 9,086,000   Direct-labor costs     $ 7,207,400     Required: prepare a schedule as of December 31, 20x1, to compute the physical flow of units.       2. prepare a schedule as of December 31, 20x1, to compute the equivalent units of production using the weighted-average method.       3. prepare a schedule as of December 31, 20x1, to compute the costs per equivalent unit for material and conversion. Note: Round "Cost per Equivalent Unit" to 2 decimal places.        4. prepare a schedule as of December 31, 20x1, to compute the cost of work-in-process inventory.        5. prepare a schedule as of December 31, 20x1, to compute the cost of finished-goods inventory.

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter6: Process Cost Accounting—additional Procedures; Accounting For Joint Products And By-products
Section: Chapter Questions
Problem 9P: Clearwater Candy Co. had a cost per equivalent pound for the month of 4.56 for materials, 1.75 for...
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Timing Technology, Incorporated, manufactures timing devices. During 20x1, 2,700,000 units were completed and transferred to finished-goods inventory. On December 31, 20x1, there were 440,000 units in work in process. These units were 45 percent complete as to conversion and 100 percent complete as to direct material. Finished-goods inventory consisted of 1,134,000 units. Materials are added to production at the beginning of the manufacturing process, and overhead is applied to each product at the rate of 100 percent of direct-labor costs. There was no finished-goods inventory on January 1, 20x1. A review of the inventory cost records disclosed the following information:

 

 

Units

Direct Material (Costs)

Direct Labor (Costs)

Work in process, January 1, 20x1 (82% complete as to conversion)

430,000

$ 334,000

$ 327,400

Units started in production

2,710,000

 

 

Direct-material costs

 

$ 9,086,000

 

Direct-labor costs

 

 

$ 7,207,400

 

 

Required:

  1. prepare a schedule as of December 31, 20x1, to compute the physical flow of units.

 

    2. prepare a schedule as of December 31, 20x1, to compute the equivalent units of production using the weighted-average method.

 

    3. prepare a schedule as of December 31, 20x1, to compute the costs per equivalent unit for material and conversion.

Note: Round "Cost per Equivalent Unit" to 2 decimal places.

 

     4. prepare a schedule as of December 31, 20x1, to compute the cost of work-in-process inventory.

 

     5. prepare a schedule as of December 31, 20x1, to compute the cost of finished-goods inventory.

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Thank you for the help,

I have two follow up questions regarding this, 

-First question is 3. Calculation of cost per equivalent units in ( converstion)

beginning Work in the process should it be 654,800 instead of 327,400 becuase converstion costs = direct labor + overhead and in this case it would be 327,400 + 100% * 327,400 = 654,800?

and Cost incurred during the period for conversation cost = Direct labor cost + overhead cost = 7,207,400 + (100% * 7,207,400) = 14,414,800?

-Second question is 5. Calculation of Cost of units Completed and Transferred out (Finished Goods) for December 31, 20x1, should it we use Equivalent Units (A) 1,134,000 units instead of 2,700,000  becuase we are preparing a schedule of December 31? 

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