Question

en A deodorant manufacturer offers the following information: WIP Inventory, January 1 O units Units started 25,600 units Units completed and transferred out 17,200 units WIP Inventory, December 31 8,400 units Direct materials $285,480 Direct labor $580,000 Manufacturing Overhead $331,920 The units in ending WIP Inventory were 60% complete for materials and 40% complete for conversion costs. What is the total cost of units in ending WIP? (Round intermediate calculations to the nearest cent and the final answer to the nearest dollar.) ar O A $372,587 OB. $213,730 OC. $223,557 OD $149,016

Answer 1

Answer

PHYSICAL UNITS

Particulars	units
Beginning work in process	0
Units started into production	25,600
Total units to be accounted	25,600
Units completed and transferred out	17,200
Ending work in process inventory	8,400
Total units to be accounted	25,600

EQUIVALENT UNITS

	Direct material	conversion cost
Units completed	17,200	17,200
Ending work in process	5,040 (8,400 × 60%)	3,360 (8,400 × 40%)
Equivalent units	22,240	20,560

COST PER EQUIVALENT UNITS

Cost per equivalent units of material

= 285,480 / 22,240 = $12.83

Cost per equivalent unit of conversion cost

   = (580,000 + 331,920) / 20,560 = $44.35

COST OF ENDING WORK IN PROCESS INVENTORY

= (5,040 × 12.84) + (3,360 × 44.35) = $213,730

The total cost of ending work in process inventory is $213,730.

Option B $213,730 is CORRECT

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