9.Department A had 4,700 units in Work in Process that were 64% completed at the
ID: 2338521 • Letter: 9
Question
9.Department A had 4,700 units in Work in Process that were 64% completed at the beginning of the period at a cost of $6,800. During the period, 27,200 units of direct materials were added at a cost of $62,560, and 29,700 units were completed. At the end of the period, 2,200 units were 25% completed. All materials are added at the beginning of the process. Direct labor was $25,500 and factory overhead was $5,500. The cost of the 2,200 units in process at the end of the period if the first-in, first-out method is used to cost inventories was
a.$5,373
b.$5,686
c.$5,060
d.$6,312
Explanation / Answer
Unit transferred out = 4700+27200-2200 = 29700 Unit
Equivalent unit of material = (4700*0%+25000*100%+2200*100%) = 27200
Equivalent unit of conversion = (4700*36%+25000*100%+2200*25%) = 27242
Cost per equivalent unit of material = 62560/27200 = 2.3
Cost per equivalent unit of conversion = (5500+25500)/27242 = 1.14
Cost of ending work in process = (2200*2.3+550*1.14) = 5686
So answer is b) $5686
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