Gregg Industries uses three operations in sequence to manufacture an assortment
ID: 2603659 • Letter: G
Question
Gregg Industries uses three operations in sequence to manufacture an assortment of flower baskets. In each operation, the same procedures, time, and costs are used to perform that operation, regardless of the basket style being produced. During March, a batch of 500 baskets of style D and a batch of 800 baskets of style F were put through the first operation. All materials for a batch are introduced at the beginning of the operation for that batch. The costs shown below were incurred in March for the first operation (assume WAC approach) $4,450 $3,600 Direct labor Manufacturing overhead Direct materials: Style D Style F $1,200 $2,400 There were no inventories at the beginning of the month; 400 units of Style D and 600 units of Style F were transferred to the next operation. The ending inventories were 30% and 60% complete for Styles D and F, respectively. Required: What is the total cost of the ending inventory in process for operation #17Explanation / Answer
Solution: Total cost of ending inventory $1890
Working:
Equivalent units of production
D
F
Started and completed
400
600
Ending inventory
30
120
Total
430
720
Unit costs:
Working
Materials - D
$2.40
$1,200/500
Materials - F
$3.00
$2,400/800
Conversion costs
$7.00
($3,600 + 4,450)/(430 + 720)
Ending inventory
Materials - D
$450
(100* $2.40) + (30 *$7.00)
Materials - F
$1,440
(200 * $3.00) + (120* $7.00)
$1,890
Equivalent units of production
D
F
Started and completed
400
600
Ending inventory
30
120
Total
430
720
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.