Overton Company has gathered the following information. Units in beginning work in process 21,200 Units started into production 178,800 Units in ending work in process 25,700 Percent complete in ending work in process: Conversion costs 60 % Materials 100 % Costs incurred: Direct materials $100,000 Direct labor $373,074 Overhead $186,600
(a) Compute equivalent units of production for materials and for conversion costs.
(b) Determine the unit costs of production.
(c) Show the assignment of costs to units transferred out and in process.

(a) 200,000; 189,720

(b) $0.5; $2.95

(c) $601,335

Explanation:

(a) Units transferred out:

= Beginning work in process + Started into production - Ending work in process

= 21,200 units + 178,800 units - 25,700 units

= 174,300

Equivalent units of production for materials:

= Units transferred out + Work in process at April 30

= 174,300 + (100% × 25,700)

= 174,300 + 25,700

= 200,000 units

Equivalent units of production for conversion costs:

= Units transferred out + Work in process at April 30

= 174,300 + (60% × 25,700)

= 174,300 + 15,420

= 189,720 units

(b) Unit costs of production for material:

= Total material costs ÷ Equivalent units of production for materials

= $100,000 ÷ 200,000

= $0.5

Unit costs of production for conversion:

= Total conversion costs ÷ Equivalent units of production for conversion

= ($373,074 + $186,600) ÷ 189,720

= $559,674 ÷ 189,720

= $2.95

(c) Cost to units transferred out and in process:

= Units transferred out × Total cost per unit

= 174,300 × ($0.5 + $2.95)

= 174,300 × $3.45

= $601,335

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