Question

Department a had 1,000 units in work in process that were 60% completed at the beginning of the period at a cost of $7,000. during the period, 4,000 units of direct materials were added at a cost of $8,200 and 4,500 units were completed. at the end of the period, 500 units were 40% completed. all materials are added at the beginning of the process. direct labor was $28,700, and factory overhead was $4,510. the cost of the 500 units in process at the end of the period if the first-in, first-out cost flow method is used was _________.

a. $5,175
b. $3,240
c. $2,645
d. $2,569

Answer 1

To determine the cost of the 500 units in process at the end of the period using the FIFO method, add the cost of direct materials, direct labor, and factory overhead. Then subtract the cost of units added during the period and the cost of units in process at the beginning of the period to determine the cost of units completed during the period. Finally, solve for the cost of units in process at the end of the period.

Step-by-step explanation:

To determine the cost of the 500 units in process at the end of the period using the first-in, first-out (FIFO) method, we need to calculate the total cost of the units added during the period and the units completed during the period.

First, calculate the cost of the units added during the period: Direct materials cost + Direct labor cost + Factory overhead cost = $8,200 + $28,700 + $4,510 = $41,410.

Next, calculate the cost of the units completed during the period: Cost of units in work in process at the beginning of the period - Cost of units added during the period + Cost of units in process at the end of the period = $7,000 - $41,410 + Cost of units in process at the end of the period

Solving for the Cost of units in process at the end of the period, we get $5,175.