Department A had 4,200 units in Work in Process that were 74% completed at the b

Question

Department A had 4,200 units in Work in Process that were 74% completed at the beginning of the period at a cost of $7,600. During the period, 28,800 units of direct materials were added at a cost of $69,120, and 30,500 units were completed. At the end of the period, 2,500 units were 36% completed. All materials are added at the beginning of the process. Direct labor was $27,500 and factory overhead was $5,600. The cost of the 2,500 units in process at the end of the period if the first-in, first-out method is used to cost inventories was

$6,000

$6,527

$7,053

$8,106

Explanation / Answer

Direct materials Conversion costs Work in process, beginning 0 1092 Units started and completed 26300 26300 Work in process, ending 2500 900 Equivalent units 28800 28292 Direct materials Conversion costs Current costs 69120 33100 Equivalent units 28800 28292 Cost per Equivalent unit 2.4 1.1699 Cost of the 2,500 units in process at the end of the period = (2500*2.4)+(900*1.1699)= $7053

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