Department) had no work in process at the beginning ofthe period; 18,000 units w

Question

Department) had no work in process at the beginning ofthe period; 18,000 units were completed during the period; and 2,000 units were 30% completed at the end of the period. The following manufacturing costs were debited to the departmental work in process account during the period (Assume the company uses FIFO and rounds cost per unit to two decmal places): Direct materials (20,000 at ss) Diredt labor Factory overhead $100,000 142,300 57,200 Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the departmental work in process inventory at the end of the period? Oa. $283,140 Ob. $199,500 Oc. $16,438 Od. $90,000

Explanation / Answer

Yes the answer c is correct.

Using equivalent cost approach cost will be:-

Material cost :- $10000(2000*$5) as the material is 100 complete.

Direct Labour and Factory overhead :- since it is completed only for 30 we will allocate on that basis.

Equivalent units :- 600(2000*30)

Direct labour :- $4590.32 (142300*600/18600)

Factory overhead :- $1845.16(57200*600/18600)

Total cost of wip :- $16435.48

The difference is due to rounding off of the calculation

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