Q2. The Daltry Tractor Company manufactures small garden tractors on a highly
automated assembly line. Its costing system uses two cost categories, direct materials and
conversion costs. Each tractor must pass through the Assembly Department and the Testing
Department. Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production. Daltry Tractor uses weighted-
average costing.
Data for the Assembly Department for April 2012 are:
Work in process, beginning inventory 400 units
Direct materials (100% complete)
Conversion costs (30% complete)
Units started during April 1,200 units
Work in process, ending inventory: 250 units
Direct materials (100% complete)
Conversion costs (50% complete)
Costs for April 2012:
Work in process, beginning inventory:
Direct materials $230,000
Conversion costs $220,000
Direct materials costs added during April $700,000
Conversion costs added during April $1,175,000
Required:
A. What are the equivalent units for direct materials and conversion costs, respectively, for
April?
B. What is the total amount debited to the Work-in-Process account during the month of April?
C. What is the direct materials cost per equivalent unit during April?
D. What is the conversion cost per equivalent unit in April?
E. What amount of direct materials costs are assigned to the ending Work-in-Process account for
April?
F. What amount of conversion costs are assigned to the ending Work-in-Process account for April?
A. Equivalent units for direct materials:
Beginning WIP units x percentage complete + Started and completed units + Ending WIP units x percentage complete
400 units x 100% + 1,200 units + 250 units x 100% = 400 + 1,200 + 250 = 1,850 equivalent units
Equivalent units for conversion costs:
Beginning WIP units x percentage complete + Started and completed units + Ending WIP units x percentage complete
400 units x 30% + 1,200 units + 250 units x 50% = 120 + 1,200 + 125 = 1,445 equivalent units
B. Total amount debited to the Work-in-Process account:
Direct materials costs added during April + Conversion costs added during April
$700,000 + $1,175,000 = $1,875,000
C. Direct materials cost per equivalent unit:
Total direct materials costs added during April / Equivalent units for direct materials
$700,000 / 1,850 = $378.38 per equivalent unit
D. Conversion cost per equivalent unit:
Total conversion costs added during April / Equivalent units for conversion costs
$1,175,000 / 1,445 = $813.45 per equivalent unit
E. Direct materials costs assigned to ending WIP account:
Ending WIP units x direct materials cost per equivalent unit
250 units x $378.38 = $94,595
F. Conversion costs assigned to ending WIP account:
Ending WIP units x conversion cost per equivalent unit
250 units x $813.45 = $203,363.75