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-   -   Managerial accounting conversion cost (https://www.askmehelpdesk.com/showthread.php?t=449980)

  • Feb 21, 2010, 09:49 PM
    hunt4her2
    managerial accounting conversion cost
    Weighted Average Process Costing

    1. Physical flow of units:
    Physical
    Units
    Work in process, 1/1/x1 200,000
    Units started during 20x1 1,000,000
    Total units to account for 1,200,000

    Units completed and transferred out during 20x1 900,000
    Work in process, 12/31/x1 300,000
    Total units accounted for 1,200,000

    2. Equivalent units:
    Percentage of
    Completion Equivalent Units
    Physical with Respect Direct
    Units to Conversion Material Conversion
    Work in process, 1/1/x1 200,000 80%
    Units started during 20x1 1,000,000
    Total units to account for 1,200,000

    Units completed and transferred out during 20x1 900,000 100% 900,000 900,000
    Work in process, 12/31/x1 300,000 50% 300,000 150,000
    Total units accounted for 1,200,000
    Total equivalent units 1,200,000 1,050,000

    3. Costs per equivalent unit:
    Direct
    Material Conversion Total
    Work in process, 1/1/x1 $200,000 xxxx xxxxx
    Units started during 20x1 1,300,000 xxxx xxxxx
    Total costs to account for $1,500,000 xxxx xxxxx
    Equivalent units 1,200,000 1,050,000
    Costs per equivalent unit $1.25 xxxx xxxxx

    4. Cost of ending inventories:

    Cost of goods completed and transferred out:
    Units transferred out 900,000
    Total cost per equivalent unit xxxx
    xxxx

    Cost remaining in 12/31/x1 work-in-process inventory:
    Direct material:
    # of equivalent units of direct material 300,000
    Cost per equivalent unit of direct material xxxx
    xxxx
    Conversion:
    # of equivalent units of conversion 150,000
    Cost per equivalent unit of conversion xxxx
    xxxx
    Cost of 12/31/x1 work-in-process xxxx


    Check: Cost of goods completed and transferred out xxxx
    Cost of 12/31/x1 work-in-process inventory xxxx
    Total costs accounted for xxxx

    Ending finished-goods inventory:
    Units completed during 20x1 900,000
    Units remaining in finished-goods inventory, 12/31/x1 200,000
    Cost of goods completed and transferred out xxxx
    Cost of 12/31/x1 finished-goods inventory xxxx
  • Feb 23, 2010, 02:25 AM
    morgaine300

    So starting in Step #3, what happened to conversion costs?

    (Also please check your post and see that it's legible. I had a heck of a time following all that.)

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