Department G had 3,915 units, one-third completed at the beginning of the period

Question

Department G had 3,915 units, one-third completed at the beginning of the period, 12,174 units were completed during the period, 1,943 units were one-fifth completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:

Assuming that all direct materials are placed in process at the beginning of production and that the first-in, first-out method of inventory costing is used, what is the total cost of 3,915 units of beginning inventory which were completed during the period?

Work in process, beginning of period $32,596 Costs added during period:    Direct materials $111,420    Direct labor $74,280    Factory overhead $24,760

Explanation / Answer

Hi,

Please find the answer as follows:

Total Unit completed during the period (labor and Overhead)= 3915*(2/3)+ (12174-3915)+1943/5 = 11257.6

Total Cost Incurred(Labor and Overhead) =74280 + 24760 = 99040

Cost per unit = 99040/11257.6 = 8.797 or 8.80

Total Cost of 3915 Units = 32596 + 8.80*3915*2/3 = 55564

Thanks.

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