Calculate equivalent units production

To answer these questions, we'll follow a step-by-step approach:

1. Prepare a physical flow schedule:

a. Equivalent Units of Direct Materials:

Units completed: 700,000
Ending WIP (100% materials): 50,000
Total Equivalent Units for Direct Materials: 700,000 + 50,000 = 750,000 equivalent units

b. Conversion costs per unit:
Total Manufacturing Overhead Cost = (Direct Labor Cost x 150%) + (Inspection Hours x $40) + (Purchase Orders x $1,000)
Total Manufacturing Overhead Cost = ($732,000 x 1.5) + ($40 x 7,450) + ($1,000 x 800) = $1,098,000 + $298,000 + $800,000 = $2,196,000

Conversion Cost per Unit = Total Manufacturing Overhead Cost / Total Equivalent Units for Conversion Costs
Conversion Cost per Unit = $2,196,000 / 732,000 equivalent units ≈ $3.00 per unit

Welding Department:
Debit Work in Process Inventory (Welding) $8,400,000 Credit Work in Process Inventory (Plate Cutting) $8,400,000

c. The cost assigned to units in ending inventory:
Ending WIP Cost = Units in Ending WIP x Total Manufacturing Cost per Unit Ending WIP Cost = 50,000 units x $12.00 per unit = $600,000