Required:
1. Compute the Grinding Department's equivalent units of production for materials and conversion in May.
2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May.
3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May.
4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.
1. The equivalent units of production is as follows:
Materials = 542,000 unitsConversion = 504,000 units.2. The equivalent cost per unit is as follows:
Materials = $1.22Conversion = $0.50.3. The cost of ending work in process inventory is as follows:
Materials Conversion Total
Ending WIP $115,900 $28,500 $144,400
4. The cost of units transferred out is as follows:
Materials Conversion Total
Units transferred out $545,340 $223,500 $768,840
What is the equivalent unit of production?The equivalent unit of production refers to the number of uncompleted units of production adjusted using their percentages of completion.
Physical Units:
Pounds
Beginning WIP 81,000
Units introduced 461,000
Total available 542,000
Ending WIP 95,000
Units transferred 447,000
Equivalent Units of Production:Pounds Materials Conversion
Beginning WIP 81,000 0 0
Units transferred out 447,000 447,000 447,000
Ending WIP 95,000 95,000 57,000 (95,000 x 60%)
Total equivalent units 542,000 504,000
Production Costs:Pounds Materials Conversion Total
Beginning WIP 81,000 $85,860 $30,780 $116,640
Units introduced 461,000 575,380 221,220 796,600
Total production costs $661,240 $252,000 $913,240
Cost per equivalent unit:Materials Conversion
Total production costs $661,240 $252,000
Total equivalent units 542,000 504,000
Cost per equivalent unit $1.22 $0.50 ($252,000/504,000)
Accounting for Production Costs:Materials Conversion Total
Units transferred out $545,340 $223,500 $768,840
($1.22 x 447,000) ($0.50 x 447,000)
Ending WIP $115,900 $28,500 $144,400
($1.22 x 95,000) ($0.50 x 57,000)
Total costs accounted for $661,240 $252,000 $913,240
Learn more about equivalent units of production at https://brainly.com/question/16259709.
#SPJ1
The calculations involve computing the equivalent units of production (EUP) for materials and conversion, computing costs per equivalent unit, and then using these figures to calculate the cost of ending work in process inventory and cost of units transferred out.
Explanation:The question requires us to compute several figures related to the Grinding Department's production and costs during May using the concept of equivalent units of production (EUP). EUP is a method used in cost accounting to express the amount of work completed in partial units. It's a way to smoothly apportion costs between completed and partially completed inventory.
1. The equivalent units of production for materials and conversion can be computed by adding the units in beginning Work in Process Inventory (WIP) plus the units started during the period, factoring in the percentage of completion for both materials and conversion.
2. To compute the costs per EUP for materials and conversion, you will need to divide the total costs in the department (both transferred in and added) by the total EUP calculated in the previous step.
3. The cost of ending WIP inventory for materials, conversion and total could be calculated by multiplying the EUP in ending inventory for each cost category by the cost per EUP.
4. Finally, the cost of units transferred out is calculated by multiplying the EUP in the units transferred out by the costs per EUP for both materials and conversion costs.
Learn more about Cost Accounting here:https://brainly.com/question/34118432
#SPJ2
1. Demonstrate understanding of the value of auditing in an economy and theories explaining the demand for auditing;
Auditing plays important role by providing assurance and credibility to financial statements which enhances investor confidence and promotes efficient allocation of resources.
Why is auditing important for the economy?Auditing is essential for the economy as it helps maintain trust and confidence in the financial information reported by businesses. By conducting independent assessments of financial statements, auditors provide assurance to stakeholders that the information is reliable and accurate.
This assurance is particularly valuable for investors, creditors, and other parties who rely on financial statements to make informed decisions. Auditing also helps detect and prevent fraud, mismanagement, and other financial irregularities and thereby safeguarding the integrity of the financial system.
Read more about auditing
brainly.com/question/24317218
#SPJ1
