uses process costing in its department. at the beginning it had 12,000 units in
ID: 2483200 • Letter: U
Question
uses process costing in its department. at the beginning it had 12,000 units in beginning work in process that were 40% complete with respect to conversion. during the month it put 87,000 units into production and completed 89,000 good units. at the end of the month there were 3000 units in ending work in process that were 70% complete with respect to conversion. direct materials are added in the beginning of the process. inspection occurs at the end of the process and normal spoilage is 6 % of good output. costs related to beginning inventory is 36, 800 for direct materials and 28,600 for conversion costs. during the month the company issued 280,000 of direct materials and incurred 599,400 of conversion costs.
weighted average method is used for process costing what is the total cost of goods completed and transferred to finished goods
a 928704
b 854400
c 877,440
d 905,664
e 921,600
Explanation / Answer
Equivalent units of production Details Units % Material EUP Material % Conversion EUP Conversion Output Good Units 89,000 100% 89,000 100% 89,000 Closing WIP 3,000 100% 3,000 70% 2,100 Spoilage 7,000 100% 7,000 100% 7,000 Total Equivalent Units Produced 99,000 99,000 98,100 Normal Spoilage allowed @6%= 5,340 5,340 5,340 Costs Incurred Materials Conversion Total Opening WIP 36,800 28,600 65,400 Incurred During Month 280,000 599,400 879,400 Total 316,800 628,000 944,800 Equivalent Units produced 99,000 98,100 Cost per Equivalent unit $ 3.20 $ 6.40 Cost of Goods completed and transferred to Materials Conversion Total Finished goods will include normal spoilage units So Equivalent Units completed & Transferred (including normal spoilage)= 94,340 94,340 Cost of Goods completed and transferred= 301,888 603,776 905,664 So correct option is d, $905,664
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