Question

A manufacturing department has 50,000 EUP for units completed and transferred out and 4,500 EUP for units in ending inventory. Materials cost is $2.50 per EUP and labor and overhead cost is $3.75 per EUP.

The total amount of ending work in process inventory is _____.

Answer 1

Value of closing inventory = $ 28,125.00

Step-by-step explanation:

To value inventory, we multiply the cost per equivalent unit of production (cost per EUP) by the the number of equivalent units(EUP) for each of the cost element.

So the value of the closing inventory, is determined as follows:

Value of inventory = cost per E.U.P × number of E.U.P

Material = $2.50 × 4,500 = 11,250.00

Labour and overhead= $3.75 × 4,500 = 16,875.00

Total amount of work in progress

= 11,250 + 16, 875

= $ 28,125.00