Department A had 4,485 units in work in process that were 80% completed as to la
ID: 2463699 • Letter: D
Question
Department A had 4,485 units in work in process that were 80% completed as to labor and overhead at the beginning of the period, 39,175 units of direct materials were added during the period. 41,789 units were completed during the period and 2,231 units were 25% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process at a cost of $12,632. Direct labor was $25,092 and factory overhead was $5,751. What was the cost of the 2,231 units in process at the end of the period if the first in first out method is used to cost inventories. Please explain how you got the answer. A. $2,231 B. $719 C. $1,167 D. $7,711
Explanation / Answer
Answer : C. $1,167
Material Conversion
=> Opening WIP 4845 - 20% 969
Units introduced and completed 36944 36944 100% 36944
Closing WIP 2231 2231 25% 557.75
EQUIVALENT UNITS 39175 38470.75
COST INCURRED $12632 $30843
COST PER EQUIVALENT UNIT $0.322 $0.802
Value of the ending WIP = 2231 * 0.322 + 557.75 * 0.802 = $1165.69 OR $1167
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