Question

PB10.

LO 5.4The packaging department began the month with 750 units that were 100% complete with regard to material and 25% complete with regard to conversion. It received 9,500 units from the processing department and ended the month with 500 units that were 100% complete with regard to materials and 75% complete with regard to conversion. With a $7 per unit material cost and a $4 per unit cost for conversion, what is the cost of the units transferred out and remaining in ending inventory?

Answer 1

The cost of the units transferred out and remaining in ending inventory is $ 107,250 and $ 4,000 respectively.

Step-by-step explanation:

Calculation of total cost of units transferred out

Units transferred out = 750+ 9500- 500 = 9,750 units

Total cost per unit = material cost per unit + conversion cost

= 7 + 4

= $11

Units transferred out = 11 * 9750 = $ 107,250

Calculation of total cost of closing units

Total Material cost = 7 * (500) = 2,500

Total Coversion Cost = 4 * (500*75%) = 1,500

Total cost = $ 4,000