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Question 18.6: The costs per equivalent unit of direct materials and conver...

The costs per equivalent unit of direct materials and conversion in the Bottling Department of Rocky Springs Beverage Company are $0.40 and $0.15, respectively. The equivalent units to be assigned costs are as follows:

Equivalent Units
Direct Materials Conversion
Inventory in process, beginning of period 0 2,800
Started and completed during the period 54,000 54,000
Transferred out of Bottling (completed) 54,000 56,800
Inventory in process, end of period   3,000   1,800
Total units to be assigned costs \underline{\underline{57,000}} \underline{\underline{58,600}}

The beginning work in process inventory had a cost of $1,860. Determine the cost of units transferred out and the ending work in process inventory.

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Direct Materials Costs Conversion Costs Total Costs
Inventory in process, beginning of period . . . . . . . $ 1,860
Inventory in process, beginning of period . . . . . . . 0  + 2,800 × $0.15 420
Started and completed during the period . . . . . . . 54,000 × $0.40  + 54,000 × $0.15 29,700
Transferred out of Bottling (completed). . . . . . . . . . $31,980
Inventory in process, end of period . . . . . . . . . . . . . . 3,000 × $0.40 + 1,800 × $0.15   1,470
Total costs assigned by the Bottling Department . . . \underline{\underline{\$ \ 33,450}}
Completed and transferred out of production . . . $31,980
Inventory in process, ending. . . . . . . . . . . . . . . . . . . $ 1,470

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