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  • 1.  PROCESS COSTING HELP

    Posted 04-26-2022 03:14 PM
    How did they reach the cost transferred out? 33,280?




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    Tayba Al-Mehdar
    Controller
    Khobar
    Saudi Arabia
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  • 2.  RE: PROCESS COSTING HELP

    Posted 04-27-2022 02:22 AM
    You can calculate it while using the following steps 
    First for the materials they are added at the beginning of the process so for materials they are 3000 ((15000÷10000)*2000)     
    Second is to how to allocate for conversion cost and as they said that the conversion costs are evenly allocated and the question said they were 70% complete so it will be ~3723 for this you have to calculatethe the equivalent units 9400 ((2000*0,7)+8000) 
    then you need to calculate 3723 as follows ((25000÷9400)*1400) 
    then when you add 3000 and 3723 it will be 6723 which it is the answer 


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    Ahmad Salou
    Student
    Amman
    Jordan
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    Original Message


  • 3.  RE: PROCESS COSTING HELP

    Posted 04-27-2022 03:14 AM
    Hello Tayba,

    Materials EUP is 10,000 as the Materials were added at the beginning, Therefore the Cost per EUP is 15,000 / 10,000 = 1.5$ 
    To get Materials EWIP you shall multiply 1.5 * 2000 (EWIP) = 3,000 $
    As for the. Conversion Cost , EUP is (8,000+2000* 70%) = 9,400 EUP
    The Cost per EUP for the CC is 25,000 / 9400 = 2.66 $
    To get the EWIP , you shall multiply 2.66 * 1400 (EWIP) = 3,720 $
    Adding DM + CC to get the EWIP for the Whole process 3,000 + 3,720 =6,720 $
    The same Idea for the transferred Cost
    For the DM , 1.5 * 8,000(Transferred out Units) = 12,000 $
    For the CC , 2.66 * 8,000(Completed units)
    = 21,280 $
    Total will be 12,000 + 21,280 = 33,280 $



    Original Message