Amounts are in $
1. Material cost transferred to WIP account
= Purchased materials - excess of closing stock over opening stock
= 27,000 - 2,000
= 25,000
2. Total Conversion Cost
= Direct labour + Factory overheads
= 30,000 + 10,000 + 12,000 + 9,000 + 8,000 + 500
= 69,500
3. Conversion cost transferred to WIP along with material cost
WIP inventory transferred to FG inventory
= Opening WIP + Material cost transferred in + Conversion cost transferred in - Closing WIP
= 17,000 + 25,000 + 69,500 - 18,000
= 93,500
This is the cost of units manufactured during the year
So answer is Option A - $93,500
Note :
The sellin, general and administration expenses are not manufacturing costs. So these are not added to cost of manufactured goods. (These are in general added to cost of sales)
We are not considering the changes in finished goods because it is considered to to calculate cost of goods sold
Champagne of the South, Inc. is a manufacturer of bottled sweet tea. The company's Raw Materials...
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