# CMA Study Group

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• #### 1.  Answer for Process Costing

Posted 13 days ago
Can anyone show how to solve this problem? I try to work on it but the result is not on the multiple choice. Thank you.

Fashion Inc. manufactures women's dresses using cotton and polyester. Since the same style dresses are made out of both fabrics, Fashions uses operation costing. During June, 1,000 cotton dresses were completely produced. Also during June, 1,500 polyester dresses were started by adding all materials at the beginning of the process. Of these 1,500 dresses, 700 were completely finished and the remainder were 25 percent complete by the end of the month. There was no work-in-process inventory at the beginning of June. Costs incurred during June were as follows.

 Cotton \$10,000 Polyester 22,500 Conversion costs 13,300

The cost per unit to manufacture one polyester dress during June was:

 \$20.32. \$29.78. \$22.00. \$23.87.

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Jenny Turnham
Student
Brooklyn Park MN
United States
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• #### 2.  RE: Answer for Process Costing

Posted 13 days ago
Hello Jenny,

I think the answer is: \$22.0
.
Total equivalent Polyester units completed in June = (700 x 100%) + [(1500 - 700) x 25%] = 900 dresses
Total direct Material cost for equivalent units = \$22,500 x (900 / 1500) = \$13,500 ... (Remainder balance of \$9,000 for ending inventory)
Conversion cost allocation = \$13,300 x 900 / (1,000 + 900) = \$6,300 for Polyester dresses
Total manufacturing cost for Polyester dresses = \$13,500 + \$6,300 = \$19,800​​
Manufacturing cost per unit = \$19,800 / 900 = \$22.0

Note:
Conversion cost of \$13,300 is combined of direct labor & manufacturing overhead costs for both Cotton & Polyester lines. Allocated between Cotton & Polyester dresses based on equivalent finished products.

Hope this demonstration will be clear for you

Kind regards

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Kuwait
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• #### 3.  RE: Answer for Process Costing

Posted 13 days ago

Thank you Samer for kind help,

Jenny

• #### 4.  RE: Answer for Process Costing

Posted 12 days ago
Hi, Samer I am confused with your calculation.The completed units for polyester is 700 only, why in your calculations became 900 units?. Thanks.

This is my calculation,  we arrived in the same cost per unit but I have confusion with the 900 units .
Thanks

Material                              CC
Polyester                           EUP                                    EUP

Completed 700               700                                       700
WIP End     800               800                                        200
Total          1500            1500                                      900

Cost per unit:

Material  22500/1500 = 15
CC          6300/900=          7
Tor
Total Cost /unit               22

• #### 5.  RE: Answer for Process Costing

Posted 11 days ago
700 work done
25% work in process
now total 900 unit for end of june.

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Syed Kashif Bukhari
Unemployed
Karachi
Pakistan
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• #### 6.  RE: Answer for Process Costing

Posted 11 days ago
Hi Marlon,

Actually, the confusion caused by mentioning the word "completed" instead of "produced" for 900 dresses, by splitting it into 700 completed & 200 equivalent 25% WIP .. (As thankfully mentioned by our friend Syed)
Anyhow, the concept & result are the same for both calculations of allocated production cost.

Kind regards

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