Question

Toney company uses the FIFO method to compute equivalent units. It ha unit costs of $10 for materials and $30 for conversion costs. If there are 2,500 unites in ending work in process, 100% complete as to materials and 40% complete as to conversion costs, the total cost assignable to ending work in process is

A. $45,000
B. $55,000
C. $75,000
D. $100,000

Answer 1

To compute the total cost assignable to ending work in process using the FIFO method, multiply the number of units in ending work in process by the unit costs for materials and conversion costs. The total cost assignable to ending work in process is $55,000.

Step-by-step explanation:

To compute the total cost assignable to ending work in process using the FIFO method, we need to calculate the cost of the units in the ending work in process using the unit costs for materials and conversion costs.

1. First, calculate the cost of the materials for the ending work in process:

• Number of units in ending work in process = 2,500

Cost of materials for ending work in process = Number of units in ending work in process x Material unit cost = 2,500 x $10 = $25,000

1. Next, calculate the cost of the conversion costs for the ending work in process:

• Percent complete for conversion costs = 40%

Cost of conversion costs for ending work in process = Number of units in ending work in process x Conversion cost per unit x Percent complete for conversion costs = 2,500 x $30 x 40% = $30,000

1. Finally, calculate the total cost assignable to ending work in process by summing the cost of materials and conversion costs:

Total cost assignable to ending work in process = Cost of materials for ending work in process + Cost of conversion costs for ending work in process = $25,000 + $30,000 = $55,000