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    Managerial Accounting Cost per Unit & WIP

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    Managerial Accounting, Third Edition by James Jiambalvo
    "Solving Managerial Accounting Problems Using Microsoft Excel for Windows Templates by Rex A Schildhouse"(Spreadsheet template is attached to assist in better understanding problem)

    Problem P3-1 Comprehensive Problem, One Department

    Regal Polish manufactures a single product in one department and uses a process costing system. At the start of May there were 5,000 units in process that were 100% complete with respect to directmaterials and 50%complete with respect to conversion costs (labor and overhead). During the month, the company began production on 100,000 units and ending Work in Process Inventory consisted of 2,000 units that were 100% complete with respect to material and 80% complete with respect to conversion costs.

    Cost Information: Beginning Work in Process Costs Added in May
    Direct material $3,000 $65,250
    Direct labor 125 6,151
    Manufacturing 175 7,147
    overhead
    Total: $3,300 $78,548

    Required:
    A. Calculate the cost per equivalent unit for each of the three cost
    items and in total.
    Give explantion for costs

    The denominators for the calculations of cost per equivalent are:
    "Units
    Completed" Equivalent Units
    in Ending WIP" Total
    Material Number Formula Formula Formula
    Labor Number Formula Formula Formula
    Overhead Number Formula Formula Formula

    Beginning WIP Cost Added Total Denominator Cost per EU
    Material Amount Amount Formula Number Formula
    Labor Amount Amount Formula Number Formula
    Overhead Amount Amount Formula Number Formula
    Total Formula Formula Formula Formula

    B. Calculate the cost of items completed in May and the cost of ending
    Work in Process.

    Enter formula as desired.(Formula that is to be
    entered in excel spreadsheet template)

    Cost of items in ending work in process:
    Material Amount
    Labor Amount
    Overhead Amount
    Total

    C. Reconcile the sum of the two costs in part b to the sum of beginning
    Work in Process and costs added in May.

    Title Amount
    Title Amount
    Total Formula

    Title Amount
    Title Amount
    Total Formula

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    https://brainmass.com/business/accounting/managerial-accounting-cost-per-unit-wip-273204

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    Solution Summary

    The solution computes cost per unit and work in process for Regal Polish.

    $2.19

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