Operation Costing: Work in Process Inventory
Washington, Inc., makes three models of motorized carts for vacation resorts, X 10, X 20, and X 40. Washington manufactures the carts in two assembly departments: Department A and Department B. All three models are processed initially in Department A, where all material is assembled. The X 10 model is then transferred to finished goods. After processing in Department A, the X 20 and X 40 models are transferred to Department B for final assembly, and then transferred to finished goods.
There were no beginning work in process inventories on April 1. Data for April are shown in the following table. Ending work in process is 25 percent complete in Department A and 60 percent complete in Department B. Conversion costs are allocated based on the number of equivalent units processed in each department.
|
|
Total |
X 10 |
X 20 |
X 40 |
|
Units started |
|
500 |
300 |
200 |
|
Units completed in Department A |
|
400 |
260 |
180 |
|
Units completed in Department B |
|
|
225 |
165 |
|
Materials |
$450,000 |
$75,000 |
$135,000 |
$240,000 |
|
Conversion costs: |
|
|
|
|
|
Department A |
$264,000 |
|
|
|
|
Department B |
42,000 |
|
|
|
|
Total conversion costs |
$306,000 |
|
|
|
a. What is the unit cost of each model transferred to finished goods in April?
b. What is the balance of work in process inventory on April 30 for Department A? Department B?