Question

Last month, Vern’s Assembly Department had a unit materials cost of $4.00 and a unit conversion cost of $5.00. The department transferred out 68,000 units during the month and had 12,000 units in ending work in process inventory that were 40% complete with respect to conversion at the end of the month. If all materials are added at the beginning of the process and conversion costs are added uniformly throughout the process, what is the total cost of the department’s ending work in process inventory?

Answer 1

The total cost of the department’s ending work in process inventory is $684,000

Step-by-step explanation:

The computation of the total cost is shown below:

= Material cost + conversion cost

where,

Material cost = (Transferred units + ending work in progress) × material cost per unit

= (68,000 units + 12,000 units) × $4

= $320,000

Conversion cost = (Transferred units + ending work in progress × percentage of completion) × material cost per unit

= (68,000 units + 12,000 units × 40%) × $5

= $364,000

Now put these values to the above formula

So, the value would equal to

= $32,000 + $364,000

= $684,000