(a) Determine the cost assigned to (a) transferred out units and (b) ending work in process units. Cost of transferred out units is 112,000.ProcessCosting:Processcostingisatoolusedtoascertainthecostincurredbythebusinessateachlevelofproduction.Itisalsousedasacostcontroltechnique.Materialcost3 per unit. Conversion cost 5perunits.Transferredoutunitsare14,000units.Formulatocalculatetotalmaterialcost,TotalMaterialCost=TransferredoutUnits×MaterialCostPerUnitSubstitute14,000unitsfortransferredoutunitsand3 for material cost per units. Total Material Cost = 14 , 000 units × 3= 42 , 000 Formula to calculate conversion cost, Total Conversion Cost = Transferred out Units × Conversion Cost Per Unit Substitute 14,000 units for transferred out units and 5forconversioncostperunits.TotalConversionCost=14,000units× 5 = 70,000Formulatocalculatethecostoftheunitstransferredout,Costoftheunitstransferredout=Totalmaterialcost+TotalconversioncostSubstitute42,000 of total material cost and 70,000oftotalconversioncost.Costoftheunitstransferredout=Totalmaterialcost+Totalconversioncost=42,000+70,000=112,000 Formula to calculate cost assigned to transferred out units, Cost of Transferred Out Units = Material Cost + Conversion Cost Substitute 42,000formaterialcostand70,000 for conversion cost. Cost of Transferred Out Units = 42,000+ 70 , 000 = 112,000Hence,thecostoftransferredoutunitsis112,000. (b) Cost of ending work in process units is 8,500.Given,Materialcost3 per unit. Conversion cost 5perunits.Endingworkinprocessare2,000units.Proportionofcompletionofworkis253 for material cost per units. Total Material Cost = 2 , 000 units × 3= 6 , 000 Formula to calculate conversion cost, Total Conversion Cost = [ ( Ending Work in process × Conversion Cost per Unit ) × Proportion of Completion ] Substitute 2,000 units for ending work in process, 5forconversioncostperunitand0.25forproportionofcompletion.TotalConversionCost=2,000units× 5 × 0.25 = 10,000×0.25= 2 , 500 Formula to calculate cost assigned to ending work in process units, Cost of Ending Work in Process = Material Cost + Conversion Cost Substitute 6,000formaterialcostand2,500 for conversion cost. Cost of Ending Work in Process = 6,000+ 2 , 500 = 8,500Hence,costofendingworkinprocessunitsis8,500. Hence, the cost of ending work in process units is $8,500.

Question

Filo · Accepted Answer

[{'solutionSubsections': [{'sectionName': 'Solution', 'sectionText': '-->
(a)
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Determine the cost assigned to (a) transferred out units and (b) ending work in process units.
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Cost of transferred out units is $112,000.
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Process Costing: Process costing is a tool used to ascertain the cost incurred by the business at each level of production. It is also used as a cost control technique.
Material cost $3 per unit.
Conversion cost $5 per units.
Transferred out units are 14,000 units.
Formula to calculate total material cost,
Total Material Cost=Transferred out Units×Material Cost Per Unit
Substitute 14,000 units for transferred out units and $3 for material cost per units.
Total Material Cost=14,000 units×$3=$42,000
Formula to calculate conversion cost,
Total Conversion Cost=Transferred out Units×Conversion Cost Per Unit
Substitute 14,000 units for transferred out units and $5 for conversion cost per units.
Total Conversion Cost=14,000 units×$5=$70,000
Formula to calculate the cost of the units transferred out,
Cost of the units transferred out = Total material cost+Total conversion cost
Substitute $42,000 of total material cost and $70,000 of total conversion cost.
Cost of the units transferred out = Total material cost+Total conversion cost=$42,000+$70,000=$112,000
Formula to calculate cost assigned to transferred out units,
Cost of Transferred Out Units=Material Cost+Conversion Cost
Substitute $42,000 for material cost and $70,000 for conversion cost.
Cost of Transferred Out Units=$42,000+$70,000=$112,000
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-->
Hence, the cost of transferred out units is $112,000.
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(b)
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Cost of ending work in process units is $8,500.
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Given,
Material cost $3 per unit.
Conversion cost $5 per units.
Ending work in process are 2,000 units.
Proportion of completion of work is 25% or 0.25.
Formula to calculate total material cost,
Total Material Cost=Ending Work in process×Material Cost Per Unit
Substitute 2,000 units for ending work in process and $3 for material cost per units.
Total Material Cost=2,000 units×$3=$6,000
Formula to calculate conversion cost,
Total Conversion Cost=[(Ending Work in process×Conversion Cost per Unit)×Proportion of Completion]
Substitute 2,000 units for ending work in process, $5 for conversion cost per unit and 0.25 for proportion of completion.
Total Conversion Cost=2,000 units×$5×0.25=$10,000×0.25=$2,500
Formula to calculate cost assigned to ending work in process units,
Cost of Ending Work in Process=Material Cost+Conversion Cost
Substitute $6,000 for material cost and $2,500 for conversion cost.
Cost of Ending Work in Process=$6,000+$2,500=$8,500
Hence, cost of ending work in process units is $8,500.
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Hence, the cost of ending work in process units is $8,500.
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-->', 'sectionSequence': 0, 'computed': {'sectionNameWithHtmlRemoved': 'Solution', 'sectionTextWithHtmlRemoved': '(a) Determine the cost assigned to (a) transferred out units and (b) ending work in process units. Cost of transferred out units is 112,000.ProcessCosting:Processcostingisatoolusedtoascertainthecostincurredbythebusinessateachlevelofproduction.Itisalsousedasacostcontroltechnique.Materialcost3 per unit. Conversion cost 5perunits.Transferredoutunitsare14,000units.Formulatocalculatetotalmaterialcost,TotalMaterialCost=TransferredoutUnits×MaterialCostPerUnitSubstitute14,000unitsfortransferredoutunitsand3 for material cost per units. Total Material Cost = 14 , 000 units × 3= 42 , 000 Formula to calculate conversion cost, Total Conversion Cost = Transferred out Units × Conversion Cost Per Unit Substitute 14,000 units for transferred out units and 5forconversioncostperunits.TotalConversionCost=14,000units× 5 = 70,000Formulatocalculatethecostoftheunitstransferredout,Costoftheunitstransferredout=Totalmaterialcost+TotalconversioncostSubstitute42,000 of total material cost and 70,000oftotalconversioncost.Costoftheunitstransferredout=Totalmaterialcost+Totalconversioncost=42,000+70,000=112,000 Formula to calculate cost assigned to transferred out units, Cost of Transferred Out Units = Material Cost + Conversion Cost Substitute 42,000formaterialcostand70,000 for conversion cost. Cost of Transferred Out Units = 42,000+ 70 , 000 = 112,000Hence,thecostoftransferredoutunitsis112,000. (b) Cost of ending work in process units is 8,500.Given,Materialcost3 per unit. Conversion cost 5perunits.Endingworkinprocessare2,000units.Proportionofcompletionofworkis253 for material cost per units. Total Material Cost = 2 , 000 units × 3= 6 , 000 Formula to calculate conversion cost, Total Conversion Cost = [ ( Ending Work in process × Conversion Cost per Unit ) × Proportion of Completion ] Substitute 2,000 units for ending work in process, 5forconversioncostperunitand0.25forproportionofcompletion.TotalConversionCost=2,000units× 5 × 0.25 = 10,000×0.25= 2 , 500 Formula to calculate cost assigned to ending work in process units, Cost of Ending Work in Process = Material Cost + Conversion Cost Substitute 6,000formaterialcostand2,500 for conversion cost. Cost of Ending Work in Process = 6,000+ 2 , 500 = 8,500Hence,costofendingworkinprocessunitsis8,500. Hence, the cost of ending work in process units is $8,500.'}}]}]

Question Text	(a) Determine the cost assigned to (a) transferred out units and (b) ending work in process units. Cost of transferred out units is $112, 000. P rocess C os t in g : P rocesscos t in g i s a t oo l u se d t o a scer t ain t h ecos t in c u rre d b y t h e b u s in ess a t e a c h l e v e l o f p ro d u c t i o n . I t i s a l so u se d a s a cos t co n t ro lt ec hni q u e . M a t er ia l cos t$ 3 per unit. Conversion cost $5 p er u ni t s . T r an s f erre d o u t u ni t s a re 14, 000 u ni t s . F or m u l a t oc a l c u l a t e t o t a l ma t er ia l cos t, T o t a lM a t er ia lC os t = T r an s f erre d o u t U ni t s \times M a t er ia lC os tP er U ni tS u b s t i t u t e 14, 000 u ni t s f or t r an s f erre d o u t u ni t s an d$ 3 for material cost per units. Total Material Cost = 14 , 000 units × $3 =$ 42 , 000 Formula to calculate conversion cost, Total Conversion Cost = Transferred out Units × Conversion Cost Per Unit Substitute 14,000 units for transferred out units and $5 f orco n v ers i o n cos tp er u ni t s . T o t a lC o n v ers i o n C os t = 14, 000 u ni t s \times$ 5 = $70, 000 F or m u l a t oc a l c u l a t e t h ecos t o f t h e u ni t s t r an s f erre d o u t, C os t o f t h e u ni t s t r an s f erre d o u t = T o t a l ma t er ia l cos t + T o t a l co n v ers i o n cos tS u b s t i t u t e$ 42,000 of total material cost and $70, 000 o f t o t a l co n v ers i o n cos t . C os t o f t h e u ni t s t r an s f erre d o u t = T o t a l ma t er ia l cos t + T o t a l co n v ers i o n cos t =$ 42,000+ $70, 000 =$ 112,000 Formula to calculate cost assigned to transferred out units, Cost of Transferred Out Units = Material Cost + Conversion Cost Substitute $42, 000 f or ma t er ia l cos t an d$ 70,000 for conversion cost. Cost of Transferred Out Units = $42, 000 +$ 70 , 000 = $112, 000 He n ce, t h ecos t o f t r an s f erre d o u t u ni t s i s$ 112,000. (b) Cost of ending work in process units is $8, 500. G i v e n, M a t er ia l cos t$ 3 per unit. Conversion cost $5 p er u ni t s . E n d in g w or kin p rocess a re 2, 000 u ni t s . P ro p or t i o n o f co m pl e t i o n o f w or ki s 25$ 3 for material cost per units. Total Material Cost = 2 , 000 units × $3 =$ 6 , 000 Formula to calculate conversion cost, Total Conversion Cost = [ ( Ending Work in process × Conversion Cost per Unit ) × Proportion of Completion ] Substitute 2,000 units for ending work in process, $5 f orco n v ers i o n cos tp er u ni t an d 0.25 f or p ro p or t i o n o f co m pl e t i o n . T o t a lC o n v ers i o n C os t = 2, 000 u ni t s \times$ 5 × 0.25 = $10, 000 \times 0.25 =$ 2 , 500 Formula to calculate cost assigned to ending work in process units, Cost of Ending Work in Process = Material Cost + Conversion Cost Substitute $6, 000 f or ma t er ia l cos t an d$ 2,500 for conversion cost. Cost of Ending Work in Process = $6, 000 +$ 2 , 500 = $8, 500 He n ce, cos t o f e n d in g w or kin p rocess u ni t s i s$ 8,500. Hence, the cost of ending work in process units is $8,500.
Topic	All Topics
Subject	Accounting
Class	Class 12
Answer Type	Text solution:1

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