Standard costing method, assigning costs. Suppose Bio Doc determines standard costs of $8.25 per equivalent unit for direct materials and $12.70 per equivalent unit for conversion costs for both beginning work in process and work done in the current period.
1. Using the standard costing method.
Note that you first need to calculate the equivalent units of work done in the current period (for direct materials and conversion costs) to complete beginning work in process, to start and complete new units, and to produce ending work in process.
2. Compute the total direct materials and conversion costs variances for July 2011.
|
Equivalent Units |
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|
Physical Units |
Direct Materials |
Conversion Costs |
|
|
Work in process, July 1 |
8,500 |
8,500 |
1,700 |
|
Started during July |
35,000 |
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|
Completed and transferred out during July |
33,000 |
33,000 |
33,000 |
|
Work in process, July 31 |
10,500 |
10,500 |
6,300 |
|
Total Costs for July 2008 |
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|
Work in process, beginning |
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|
Direct materials |
$63,100 |
|
|
Conversion costs |
45,510 |
$108,610 |
|
Direct materials added during July |
284,900 |
|
|
Conversion costs added during July |
485,040 |
|
|
Total costs to account for |
$878,550 |
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