Question

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period; 3,000 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 $40,000 Costs added during period: Direct materials (10,400 units at $8) 83,200 Direct labor 63,000 Factory overhead 25,000 All direct materials are placed in process at the beginning of production and the first-in, first-out method of inventory costing is used. What is the total cost of 3,600 units of beginning inventory which were completed during the period (round unit cost calculations to four decimal places) ?

A. 40,000 B. 19,275 C. 16,163 D. 62,206

Answer 1

Solution:

Department G
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	3600
Units started this period	10400
Total unit to be accounted for	14000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 75%	3600	0	2700
Started and completed currently	7400	7400	7400
Transferred to finished goods	11000	7400	10100
Units in ending WIP Material - 100% Conversion - 20%	3000	3000	600
Total units accounted for	14000	10400	10700

Department G
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$171,200.00	$83,200.00	$88,000.00
Equivalent units		10400	10700
Cost per equivalent unit		$8.0000	$8.2243

Department G
Department G
Particulars	Total cost	Material	Conversion
Cost Accounted for :
Cost assigned to unit transferred out:
Cost from beginning WIP Inventory	$40,000
Current cost added to complete beginning WIP:
Material	$0	$0
Conversion (2700 * $8.2243)	$22,206		$22,206
Total Cost from beginning inventory	$62,206

Hence option D is correct.