A deodorant manufacturer offers the following information WIP Inventory, January

Question

A deodorant manufacturer offers the following information WIP Inventory, January 1 Units started Units completed and transferred out WIP Inventory, December 31 Direct materials Direct labor Manufacturing Overhead 0 units 26,600 units 17,200 units 9,400 units $276,480 $583,000 $336,920 The units in ending WIP Inventory were 60% complete for materials and 40% complete for conversion costs. What is the total cost of units in ending WIP? (Round intermediate calculations to the nearest cent and the final answer to the nearest dollar.) A.$233,326 ?. $412,572 OC. $165,026 D. $247,548

Explanation / Answer

Equivalent unit of material = (17200+9400*60%) = 22840 units

Equivalent unit of conversion = (17200+9400*40%) = 20960 units

Cost per equivalent unit of material = 276480/22840 = 12.11 per equivalent unit

Cost per equivalent unit of conversion = (583000+336920)/20960 = 43.89 per equivalent unit

Cost of ending work in process = (9400*60%*12.11+9400*40%*43.89) = 233326

so answer is a) $233,326

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