Question

A Company manufactures clay molded pottery on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Molding Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Data for the Assembly Department for August 2017 are: Work in process, beginning inventory: 3000 units Direct materials (100% complete) Conversion costs (40% complete) Units started during August 695 units Work in process, ending inventory: 500 units Direct materials (100% complete) Conversion costs (65% complete) Costs for August: Standard costs for Assembly: Direct materials $15 per unit Conversion costs $35.50 per unit Work in process, beginning inventory: Direct materials $12,400 Conversion costs $9450 What is the balance in ending work-in-process inventory

Answer 1

Ending work-in-process inventory is $19,037.50

Step-by-step explanation:

First Determine the Equivalent Units in ending work-in-process inventory in terms of direct materials and conversion costs

Direct materials ( 500 units × 100%) = 500 units

Conversion costs (500 units × 65%) = 325 units

Then determine the Value of ending work-in-process inventory

Direct materials ( 500 units × $15) = $ 7,500.00

Conversion costs (325 units × $35.50) = $ 11,537.50

Total = $19,037.50

Conclusion

Therefore, ending work-in-process inventory is $19,037.50