Question

During the month of April, Equivalent Units of production for Direct Materials and Conversion Costs were 16,000 and 12,000, respectively.

The cost of Direct Materials used during April totalled $60,000, and Conversion Costs for April totalled $84,000.
In addition, Direct Materials costs and Conversion Costs in Beginning Work in Process Inventory totalled $16,000 and $20,000, respectively.
Ending Work in Process Inventory equalled 4,000 units, 100% complete as to Direct Materials and 40% complete as to Conversion Costs.
Required:
What is the cost of Ending Work in Process Inventory as to Direct Materials Costs?

Answer 1

The cost of Ending Work in Process Inventory as to Direct Materials Costs is $15,000.

Step-by-step explanation:

To calculate the cost of Ending Work in Process Inventory as to Direct Materials Costs, we need to determine the equivalent units of Direct Materials for the ending work in process inventory and then multiply it by the cost per equivalent unit of Direct Materials. The ending work in process inventory is 4,000 units, 100% complete as to Direct Materials. Therefore, the equivalent units of Direct Materials for the ending work in process inventory would be 4,000 units.

Given that the equivalent units of production for Direct Materials in April were 16,000 units and the total Direct Materials cost for the month was $60,000, the cost per equivalent unit of Direct Materials can be calculated as $60,000 / 16,000 = $3.75.

To find the cost of Ending Work in Process Inventory as to Direct Materials Costs, we multiply the equivalent units of Direct Materials for the ending work in process inventory (4,000 units) by the cost per equivalent unit of Direct Materials ($3.75). Therefore, the cost of Ending Work in Process Inventory as to Direct Materials Costs is $3.75 * 4,000 = $15,000.