please pick the answer below )The Cutting Department is the first stage of Mark

Question

please pick the answer below

)The Cutting Department is the first stage of Mark Company's production cycle. Beginning WIP for this department was 80% complete as to conversion costs. Ending WIP was 50% complete as to conversion costs. Conversion costs in the Cutting Department for the month just ended were as follows: Units Conversion costs $22,000 $143,000 Beginning WIP 25,000 Units started and costs incurred during the month 135,000 Units completed and transferred to next department during the month Using the Department? 100,000 FIFO method, what was the conversion cost of ending WIP in the Cutting 22,000 $33,000 C) $39,000 D) $78,000

Explanation / Answer

Equivalent unit of conversion cost = (25000*20%+75000*100%+60000*50%) = 110000 units

Cost per equivalent unit = 143000/110000 = 1.3 per equivalent unit

Conversion cost of ending work in process = 60000*50%*1.3 = 39000

so answer is c) $39000

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