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Bell Computers, Ltd., located in Liverpool, England, assembles a standardized personal computer from parts it purchases from various suppliers.

Bell Computers, Ltd., located in Liverpool, England, assembles a standardized personal computer from parts it purchases from various suppliers. The production process consists of several steps, starting with assembly of the “mother” circuit board, which contains the central processing unit. This assembly takes place in the CPU Assembly Department. The company recently hired a new accountant who prepared the following report for the department for May using the weighted-average method:


Units to be accounted for:
Work in process, May 1: materials 90%
complete; conversion 80% complete 5,000
Started into production 29,000

Total units 34,000

Units accounted for as follows:
Transferred to next department 30,000
Work in process, May 31: materials 75%
complete; conversion 50% complete 4,000

Total units 34,000


Cost Reconciliation
Cost to be accounted for:
Work in process, May 1 £ 13,400
Cost added in the department 87,800

Total cost to be accounted for £ 101,200

Cost accounted for as follows:
Work in process, May 31 £ 8,200
Transferred to next department 93,000

Total cost accounted for £ 101,200


The company’s management would like some additional information about May’s operation in the CPU Assembly Department. (The currency in England is the pound, which is denoted by the symbol £.)

Required:
1. How many units were started and completed during May?

2. What were the equivalent units for May for materials and conversion costs?

3. What were the costs per equivalent unit for May? The following additional data are available concerning the department’s costs: (Round your answers to 2 decimal places. Omit the "£" sign in your response)

Materials Conversion Total
Work in process, May 1 £ 9,000 £ 4,400 £ 13,400
Costs added during May £ 57,000 £ 30,800 £ 87,800

4. Calculate the material cost and the conversion cost of the ending work in process. (Omit the "£" sign in your response.)

Materials Conversion Total
Ending work in process inventory:
Equivalent units of production
Cost per equivalent unit £ £
Cost of ending work in process inventory £ £ £

5.

The new manager of the CPU Assembly Department was asked to estimate the incremental cost of processing an additional 1,000 units through the department. He took the unit cost for an equivalent whole unit you computed in (3) above and multiplied this figure by 1,000. Will this method yield a valid estimate of incremental cost?


Yes
No

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Top Answer

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Solution to assignment of metallica_dude10 (Mar 2).xlsx

Solution to assignment of metallica_dude10 (Mar 2)
1) Total units completed and transferred to next department
Less: Total units in beginning WIP inventory
Units started and completed in May 2)...

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