partment A had 4,300 units in Work in Process that were 79% completed at the beg

Question

partment A had 4,300 units in Work in Process that were 79% completed at the beginning of the period at a cost of $6,400. During the period, 26,700 units of direct materials were added at a cost of $58,740, and 28,100 units were completed. At the end of the period, 2,900 units were 34% completed. All materials are added at the beginning of the process. Direct labor was $27,200 and factory overhead was $4,800. The cost of the 2,900 units in process at the end of the period if the first-in, first-out method is used to cost inventories was a. $8,836 b. $7,608 c. $6,380 d. $6,994

Explanation / Answer

UNITS TO ACCOUNT FOR: Beginning Work in Process units 4,300 Add: Units Started in Process 26,700 Total Units to account for: 31,000 UNITS TO BE ACCOUNTED FOR: Units completed from Beginning WIP 4300 Units started and completed 23,800 Ending Work in Process 2,900 Total Units to be accounted for: 31,000 Equivalent Units: Material Cost Conversion % Completion Units % Completion Units Units completed from Beg. WIP 0% 0 21% 903 Units started and completed 100% 23,800 100% 23,800 Ending Work in Process 100% 2,900 34% 986 Total Equivalent units 26,700 25,689 COST PER EQUIVALENT UNIT: Material Conversion Total cost added during the year 58,740 32,000 Equivalent Units 26,700 25,689 Cost per Equivalent unit 2.2 1.245 TOTAL COST ACCOUNTED FOR: Ending Work in process (2900 units) Equivalent unit Cost per EU Total Cost Material 2,900 2.2 6380 Conversison Cost 986 1.245 1228 Total cost of Ending Work in process: 7,608 Answer is b. $ 7608

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