Most confusing BEC question ever

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    Topic
  • #1659572
    nalratoss
    Participant

    EUP–equivalent unit production

    How difficult it is? I checked the answers to these questions because I had no idea how to start. And even reading the answers, I still have no clue for this question

    A sporting goods manufacturer buys wood as a direct material for baseball bats. The forming dept processes the baseball bats, and the bats are then transferred to the finishing department, where a sealant is applied. The forming department began manufacturing 10,000 “Casey Sluggers” during the month of May. Therre was no begging inventory. Costs for the Forming Department for the month of May were as follows:
    Direct materials: $33,000
    Conversion costs: $17,000
    Total $50,000

    A total of 8,000 bats were completed and transferred to the Finishing Department; the remaining 2,000 bats were still in the forming process at the end of the month. All of the forming department’s direct materials were placed in process, but, on average, only 25% of the conversion cost was applied to the ending work in progreess inventory.

    1. The cost of the units transferred to the finishing department is
    A. 50,000
    B. 40,000
    C. 53,000
    D. 42,000

    2. The cost of the work in progress inventory in the forming department at the end of May is
    A. 10,000
    B. 2500
    C. 20,000
    D. 7600

    Okay, the answer for both of the questions, first sentence says this:

    The total EUP for materials equal 10,000 because all materials for the ending work in process had already been added to production/work in progress is 100% complete as to materials (2k + 8K)

    What???

    Where is EUP? How do you get it without applying the weighted average and FIFO equation?

    FAR-80

    AUD-77

    REG-75

    BEC-82

     

    I'm done done!

Viewing 2 replies - 1 through 2 (of 2 total)
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  • #1659589
    r00shine
    Participant

    is it 1: B 2: A?

    1 is simple enough. $50000 for 10000 bats, so each bat costs $5. $5 x 8000 bats sent to finishing = 40000
    2. i feel like I am wrong but im just guessing $50000-$40000(which was sent to finishing) = $10000

    it is a tough question tho. I am guessing it isnt that simple actually since you said you didnt understand it even after reading the answer.

    AUD - 83
    BEC - 80
    FAR - 77
    REG - 81
    Oh Hi There
    #1659595
    nalratoss
    Participant

    The answer is D and D.

    Reading again, now it seems that it was refering to two types of costs: material EUP and conversion cost EUP.

    1. Total EUP equal 10,000 because (mentioned above). Thus material cost per unit was $3.3 (33,000/10,000). For conversion costs, the total EUP equal 8,500 (8,000 completed + 2,000 Ending work in progress * 25%). Thus the conversion cost was 2.00 per unit (17,000/8,500). The total cost transferred was therefore 42,400 (8000 units * (3.3+2))

    2. The amount transferred out is 42,400, since total incurred is 50,000, cost of work in process is 7,600.

    PS all work in progress should be work in process

    FAR-80

    AUD-77

    REG-75

    BEC-82

     

    I'm done done!

Viewing 2 replies - 1 through 2 (of 2 total)
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