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5 November, 15:20

The Packing Department started the month with 500 units in process, received 1,100 units from the Finishing Department, and transferred 900 units to Finished Goods. Direct materials are added at the beginning of the process and conversion costs are incurred evenly. The units still in process at the end of the month are 60% complete for conversion costs. Calculate the number of units still in process at the end of the month.

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  1. 5 November, 16:27
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    Units Still in process With respect to

    Material: 700 Units

    Conversion Costs: 700 Units x 60% = 420 Units

    Explanation:

    It is assume that Packing Department using average costing method.

    Units at the beginning of process 500 Units

    Add: Units Received from previous department 1100 Units

    Total Units 1600 Units

    Less: Units completed and transferred out 900 Units

    Units still in process 700 Units

    Percentage of completion:

    Material : Units still in process x Percentage of completion

    Material : 700 Units x 100% = 700 Units

    Conversion Cost : Units still in process x Percentage of completion

    Conversion Cost : 700 Units x 60% = 420 Units

    The process costing method indicates the process and flow of units. The still in process inventory consist material and conversion cost. The material added at the start of period hence it is 100% completed while conversion cost added at the end of period that is 60% completed. After applying percentage of completion we will get the Units still in process completed in ending inventory.
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