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Accounting: Calculating Inventory Costs and Equivalent Units

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Horngren 9th Edition
Chapter 17 Question P17A-11A

Amy Electronics makes CD players in three processes: assembly, programing, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The assembly department had no work in process inventory on October 31st. In mid-November Amy Electronics started production on 125,00 cd players. Of this number, 95,800 CD players were assembled during November and transfered out to the programming department. The November 30th work in process inventory in the assembly department was 25% of the way through the assembly process. Direct materials costing $437,500 were placed in production in assembly during November, and Direct labor of $200,800 and manufacturing overhead of $134,275 were assigned to that department.

Compute the number of equivalent units and the cost per eqivalent unit in the assemble department for November. Assign total costs in assemble department to (a) units completed and transfered to programming during November and (b) units still in process at November 30. Prepare a T account for Work in process inventory. Assemble to show its activity during November, including the November 30 balance.

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The expert calculates the inventory costs and equivalent units in accounting.

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