Sterling Company had 300 units of product in its work in process inventory at th
ID: 2456152 • Letter: S
Question
Sterling Company had 300 units of product in its work in process inventory at the beginning of the period and started 2,100 additional units during the period. At the end of the period, 760 units were in work in process inventory. The ending work in process inventory was estimated to be 60 percent complete. The cost of work in process inventory at the beginning of the period was $6,560, and $26,976 of product costs was added during the period.
Calculate the number of equivalent units of production.
Calculate the product cost per equivalent unit.
Calculate the total cost allocated between the ending Work in Process Inventory and Finished Goods Inventory accounts. (Round intermediate calculations to 2 decimal places and final answers to whole dollar amount.)
Sterling Company had 300 units of product in its work in process inventory at the beginning of the period and started 2,100 additional units during the period. At the end of the period, 760 units were in work in process inventory. The ending work in process inventory was estimated to be 60 percent complete. The cost of work in process inventory at the beginning of the period was $6,560, and $26,976 of product costs was added during the period.
Explanation / Answer
Units completed and transfered out = Beginning units+started during the year - Ending units
= 300+2100-760
= 1640 units
Equivalent units = (1640 *100%) + (760* 60%)
= 1640+ 456
= 2096 units
b)cost per equivalent unit = Total cost /equivalent unit
= (6560+26976)/2096
= 33536 /2096
= $ 16 per unit
c)cost allocation:
Finished goods = 1640 *16 =$ 26240
Ending WIP = 760* 60%* 16 =$ 7296
Total allocated cost = $ 33536
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.