Question

Williams Company computed its cost per equivalent unit for direct materials to be $2.70 and its cost per equivalent unit for conversion to be $3.42. A total of 212,000 units of product were completed and transferred out as finished goods during the month, and 30,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:

Answer 1

$1,297,440

Step-by-step explanation:

The first step is to calculate the cost of direct materials

= 212,000 × 2.70

= $572,400

The next step is to calculate the conversion

= 212,000 × 3.42

= $725,040

Therefore the amount that should be reported in the finished goods inventory can be calculated as follows

= $725,040 + $572,400

= $1,297,440