Question

Department G had 2,040 units 25% completed at the beginning of the period, 12,300 units were completed during the period, 1,700 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period:

Work in process, beginning of period	$30,700
Costs added during period:
Direct materials (11,960 units at $8)	95,680
Direct labor	78,000
Factory overhead	26,000

All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. The total cost of the departmental work in process inventory at the end of the period (round unit cost calculations to four decimal places and round your final answer to the nearest dollar)?

a.$16,515

b.$21,470

c.$15,786

d.$13,600

Answer 1

The correct answer is a) $16,515.

Supporting calculations:

FIFO:		Materials		Conversion
	Units (a)	% (b)	Equivalent Units (a*b)	% (c )	Equivalent Units (a*c)
Units of Beginning Inventory	2,040	0%	0	75%	1,530
Add: Units started and completed (12,300 units - 2,040 units)	10,260	100%	10,260	100%	10,260
Add:Units of Ending work in process	1,700	100%	1,700	20%	340
Equivalent Units			11,960		12,130
Costs added during period (a) ($78,000 + $26,000)			$95,680		$104,000
Equivalent Units (b)			11,960		12,130
Cost per equivalent unit (a/b)			$8.00		$8.57
Cost of ending materials (1,700 * $8)	$13,600
Cost of ending conversion (340 * $8.57)	$2,913.80
Cost of Ending work in process inventory	$16,514