Department E had 4,000 units in Work in Process that were 40% completed at the b

Question

Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. Department E had 4,000 units in Work in Process that were 40% completed at the beginning of the period at a cost of $12,500. Of the $12,500, $8,000 was for material and $4,500 was for conversion costs. 14,000 units of direct materials were added during the period at a cost of $28,700. 15,000 units were completed during the period, and 3,000 units were 75% completed at the end of the period. All materials are added at the beginning of the process. Direct labor was $32,450 and factory overhead was $18,710. If the average cost method is used the conversion cost per unit (to the nearest cent) would be:

Explanation / Answer

Beginning work in process (4,000 * 25%) = 1,000 + Units started and completed = 28,000 + Ending work in process (2,000 * 40%) = 800 = Equivalent units of production = 29,800 ----------------------------- " Under the FIFO method, both beginning and ending inventories are converted to an equivalent units basis. For the beginning inventory, the equivalent units represent the work done to complete the units; for the ending inventory, the equivalent units represent the work done to bring the units to a stage of partial completion at the end of the period. " The problem states that 32,000 units were completed during the period. That implies that 28,000 units were started and completed during the period (32,000 - the 4,000 in beginning work in process).

Related Questions

Navigate

• Browse (All)
• Browse D
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.