Question

In the month of April, a department had 600 units in the beginning work in process inventory that were 60% complete. These units had $61000 of materials costs and $50000 of conversion costs. All materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April, 20000 units were completed and transferred to the finished goods inventory and there were 2000 units that were 20% complete in the ending work in process inventory on April 30. During April, manufacturing costs charged to the department were: Materials $2568000; Conversion costs $3006000. The cost assigned to the units in the ending work in process inventory on April 30 was? (Round intermediate calculations to 0 decimal places, e.g. 5,275.)

Answer 1

cost to WIP at April 30th: 300,000

materials 240,000

conversion 60,000

Step-by-step explanation:

Materials equivalent units:

Materials are addedirely at the beginning of the process thus, all are at 100%

transferred out - beginning x percentage of completion + ending x % completion

20,000 - 600 x 100% + 2,000 x 100% =

20,000 - 600 + 2,000 = 21,400

equivalent cost per unit: 2,568,000 / 21,400 = 120

Ending WIP: 2,000 units x 100% x 120 = $ 240,000

Conversion equivalent units

transferred out - beginning x percentage of completion + ending x % completion

20,000 - 600 x 60% + 2,000 x 20%

20,000 - 360 + 400 = 20,040 units

equivalent cost per unit CC: 3,006,000 / 20,040 = $ 150

Ending WIP_ 2,000 units x 20% x $ 150 = $ 60,000

Ending WIP: 240,000 + 60,000 = 300,000 accumulated cost.