Question

Department S had no work in process at the beginning of the period. It added 10,000 units of direct materials during the period at a cost of $80,000. During the period, 7,500 units were completed, and 2,500 units were 45% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $51,750, and factory overhead was $24,150. The total cost of units completed during the period was

a.$105,000

b.$60,000

c.$126,000

d.$151,200

Answer 1

Correct answer----------(c) $126,000

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred	7,500			100%	7,500	100%	7,500
Closing WIP	2,500			100%	2,500	45%	1,125
Total	10,000			Total	10,000	Total	8,625

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost				$ 0
Cost incurred during period		$ 80,000	$ 75,900	$ 155,900
Total Cost to be accounted for		$ 80,000	$ 75,900	$ 155,900
Total Equivalent Units		10,000	8,625
Cost per Equivalent Units		$                   8.00	$                     8.80	$             16.80

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 8.00	2,500	$          20,000.00	7,500	$ 60,000
Conversion cost	$ 8.80	1,125	$             9,900.00	7,500	$          66,000.00
TOTAL	$ 155,900	TOTAL	$ 29,900	TOTAL	$ 126,000