Fedora, Inc., uses a weighted-average process-costing system and has one production department. All materials are introduced at the start of manufacturing; in contrast, conversion cost is incurred uniformly throughout production. The company had respective work-in-process inventories on May 1 and May 31 of 62,000 units and 70,000 units, the latter of which was 40% complete. The production supervisor noted that Fedora completed 100,000 units during the month.Costs in the May 1 work-in-process inventory were subdivided as follows: materials, $40,000; conversion, $90,000. During May, Fedora charged production with $300,000 of material and $710,000 of conversion, resulting in a material cost per equivalent unit of $2.Required:A. Determine the number of units that Fedora started during May.B.

Question

Compute the number of equivalent units with respect to conversion cost.C. Determine the conversion cost per equivalent unit.D. Compute the cost of the May 31 work-in-process inventory.E. What account would have been credited to record Fedora's completed production?

What will be an ideal response?

Answer 1

A. Since Fedora had accounted for 170,000 units (100,000 + 70,000), the company must have started 108,000 units in May (170,000 - 62,000).
B. Equivalent units for conversion cost total 128,000 [100,000 + (70,000 × 40%)].
C. The conversion cost per equivalent unit is $6.25 [($90,000 + $710,000) ÷ 128,000 units].
D. Ending work in process totals $315,000: materials, $140,000 (70,000 × $2.00) + conversion, $175,000 [(70,000 × 40%) × $6.25].
E. Work-in-Process Inventory