Problem
Regal Polish manufactures a single product in one department and uses a process costing system. At the start of May, there were 10,900 units in process that were 100 percent complete with respect to direct material and 50 percent complete with respect to conversion costs (labor and overhead). During the month, the company began production of 107,900 units. Ending Work in Process inventory consisted of 5,180 units that were 100 percent complete with respect to material and 70 percent complete with respect to conversion costs.
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Cost Information
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Beginning Work in Process
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Costs Added in May
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Direct material
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$3,900
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$76,700
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Direct labor
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110
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8,400
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Manufacturing overhead
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280
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9,400
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Total
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$4,290
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$94,500
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Calculate the cost per equivalent unit for each of the three cost items and in total.
Calculate the cost of items completed in May and the cost of ending Work in Process.
Reconcile the sum of the two costs in part b to the sum of beginning Work in Process and costs added in May.