Reno Co has several processing departments. Costs charged to Department A for January totaled $265,500 WIP 1/1 Materials $13,500 Conversion costs 8000 $21,500 Materials added during the month 75,000 Labor added during the month 104,750 Overhead added during the month 64,250 Records indicated that 3,500 units were in beginning WIP 30% completed as to conversion costs. 17,500 units were started into production and 4,500 units were in ending WIP 60% complete as to conversion costs. Materials are entered at the beginning of each process. Beginning Units 3,500 Started Units 17,500 Ending Units 4,500 Materials 100% complete Conversion 60% complete 1. Determine the EUP (equivalent units of production) 2. Determine the assignment of costs to goods transferred out and in process WIP Dept 1 Debits Credits Beg Inventory - Materials 13,500 ?? you will fill Beginning Conversion costs 8,000 Amount transferred to Dept 2 this in when it is represented at the end of the problem. Direct material 75,000 Direct Labor 104,750 Overhead 64,250 265,500 1. Calculate the This month's conversion costs: (use numbers above to recap here) 1. RECAP COSTS $ Materials $ Conversion $ Total Beginning inventory (last month) This month Total 2. Account for units – Determine the Physical Flow Beginning WIP Units started To account for Completed and transferred out Ending WIP To account for - 3. Calculate Equivalent Units Units % material EUP Materials units completed and transferred out units of ending WIP equivalent units Units % Conversion EUP Conversion units completed and transferred out units of ending WIP equivalent units 4. Determine Unit Costs $ Dir Materials $ Conversion Costs Beg inventory Costs added this month Total EUP Total Cost Units Cost per unit Total Cost per Unit 5. Allocate costs Assignment of costs Units Per Unit Total Finished Journal Entry to transfer Work in Process Costs from Dept 1 to Dept 2 Debit Credit 6. Determine Cost of ending WIP inventory #EUP $ cost per EUP $ Total cost Direct material Conversion Costs total cost of ending work is process 7 Concept Check: WIP Dept 1 Debits Credits Beg Inventory - Materials 13,500 Beginning Conversion costs 8,000 Direct material 75,000 Direct Labor 104,750 Overhead 64,250 Ending balance calculate the ending balance by adding the debit and subtracting the credit This number cannot be 265,500 since you transferred out costs to dept 2. Hint: ending balance in B115 should equal D103