Graded homework Unit 7: Peerless Joint Replacements Inventory computation Peerle

Question

Graded homework Unit 7: Peerless Joint Replacements Inventory computation Peerless Joint Replacements tracks direct materials in inventory so they can identify the shipment lot if there were to be a problem with any of their products. At the end of October, the direct material cost of their Hip and Knee Value Stream inventory (Raw Materials, Work-in- Process and Finished Goods) was $516,800. During October, there were twenty working days and their Hip and Knee Value Stream had material costs of $609,400 and conversion costs of $848,300. At the end of October, the Hip and Knee Value Stream had raw material on hand equal to eight days of production, work-in-process equal to four days of production, and finished goods equal to five days of production Create an Excel spreadsheet that computes and reports a value for ending inventory for October using the "material cost plus days of conversion cost" method.

Explanation / Answer

STATEMENT SHOWING THE ENDING INVENTORY   COST : Particulars Amount$ Amount$ a) Raw material - Direct materail (609400*8/20) $        243,760 $        243,760 b) Work in Process - Direct materail (609400*4/20) $        121,880 -Conversion cost $        169,660 $        291,540 c) Finished Goods -Direct material (609400*5/20) $        152,350 -Conversion cost $        212,075 $        364,425 Total cost of Inventory = a+b+c $        899,725

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