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In March, Kelly Company had the following unit production costs: materials $10 and conversion costs $8. On March 1, it had no work in process. During March, Kelly transferred out 22,000 units. As of March 31, 4,000 units that were 40% complete as to conversion costs and 100% complete as to materials were in ending work in process.

Required:
a. Compute the total units to be accounted for.
b. Compute the equivalent units of production.
c. Prepare a cost reconciliation schedule, including the costs of materials transferred out and the costs of materials in process.

Respuesta :

Answer:

Following are the solution to the given points:

Explanation:

For point a:

The total units to be accounted for [tex]=22,000+4,000=26,000[/tex] units

For point b:

The total material equivalent units =  [tex]22,000[/tex] finished units[tex]+ 4,000=26,000[/tex] units

The total conversion equivalent units = [tex]22,000[/tex] finished units + [tex]4,000 \times 40\%[/tex]

                                                              [tex]=22,000+ 1,600\\\\=23,600[/tex]  

For point c:

Calculating the total cost reconciliation schedule:

Cost accounted for finished goods            [tex]\$396,000[/tex]

Cost of material in the process    

material work in process [tex]\$40,000[/tex]

conversion cost in the process [tex]\$12,800 \ \ \ \ \ \ \ \$52,800 \\\\[/tex]                                                                                                                    [tex]\$448,800[/tex]