Problem:
King Company has two departments, assembly and finishing. Consider the following data for the Assembly Department:
Units Percent Direct Direct
Complete Material Labor Overhead Total
Beginning work in process 1,000 90% 2,475
Started during the month 9,000
Completed during the month 7,500
Ending work in process 2,500 60%
Costs added during the month $11,700 $6,750 $4,050 $22,500
(1) Compute the number of equivalent whole units for the Assembly Department.
(2) Calculate the cost per equivalent whole unit.
(3) Compute the amount of costs that should be transferred to the Finishing Department.
(4) Compute the amount of costs that should be assigned to the 2,500 units in ending inventory.