Figure 1 The following information relates to Department Z for the month of July
ID: 2562457 • Letter: F
Question
Figure 1
The following information relates to Department Z for the month of July, the sole processing department of Company ABC. 23,000 units (5,000 units from Beginning WIP and 18,000 units started and completed during July) were transferred out of the department to finished goods. 2,000 units remain in the department at the end of July. A calculation of equivalent units for work performed during July appears below:
Equivalent Units
Equivalent Units
Direct Materials
Labor and Overhead
Beginning WIP
0
1,500
Units started and
Completed
18,000
18,000
Ending WIP
2,000
1,600
Total
20,000
21,100
Refer to Figure 1. Assume that cost per equivalent unit of direct materials equals $10.00 per unit and that the combined cost per equivalent unit of direct labor and factory overhead equals $20,00 per unit. Also assume that prior period beginning work in process costs total $10,000. Costs of ending work-in-process using the FIFO method would equal
A. $60,000
B. $16,000
C. $42,000
D. $20,000
E. $52,000
Equivalent Units
Equivalent Units
Direct Materials
Labor and Overhead
Beginning WIP
0
1,500
Units started and
Completed
18,000
18,000
Ending WIP
2,000
1,600
Total
20,000
21,100
Explanation / Answer
E. $52,000 Particulars Materials Conversion Total Ending WIP 2,000.00 1,600.00 Cost per equivalent unit 10.00 20.00 Costs of Ending WIP Materials = 2000 * 10 Conversion = 1600 * 20 20,000.00 32,000.00 52,000.00
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