In the month of April, a department had 500 units in the beginning work in process inventory that were 60% complete. These units had $63,000 of materials costs and $44,000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April, 17,000 units were completed and transferred to the finished goods inventory and there were 2,500 units that were 20% complete in the ending work in process inventory on April 30. During April, manufacturing costs charged to the department were: Materials $2,565,000; Conversion costs $3,010,000. The cost assigned to the units in the ending work in process inventory on April 30 was a. $5,289,000 b. $5,377,000 c. $5,251,000 d. $5,270,000
In the month of April, a department had 500 units in the beginning work in process inventory that were 60% complete. These units had $63,000 of materials costs and $44,000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April, 17,000 units were completed and transferred to the finished goods inventory and there were 2,500 units that were 20% complete in the ending work in process inventory on April 30. During April,
The cost assigned to the units in the ending work in process inventory on April 30 was
a. $5,289,000
b. $5,377,000
c. $5,251,000
d. $5,270,000
In this question we have to use weighted average method because Units completed and transferred out units is given.
Weighted average method :— Under this method, equivalent units is calculated from units transferred out and ending inventory by multiplying with stage of completion.
Stage of completion of units transferred out is 100%.
After calculating equivalent units, we have to calculate cost per equivalent units by dividing total cost by equivalent units.
This Cost per equivalent unit is used to assigned the cost.
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