Question

View Policies Current Attempt in Progress Materials costs of $1155000 and conversion costs of $1344000 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 21000 units were started into production in September, and there wer 7000 units in ending work in process that were 40% complete at the end of September. What was the total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September? $1666000 $1890000 $2835000 $2268000 Save for Later Attempts: 0 of 1 used Submit Answer MacBook Air

Answer 1

Answer

The following are the calculation of physical units

Physical units

Particulars	$
Units started	21,000
Total units to be accounted	21,000
Units completed	14,000
Ending work in process inventory	7,000
Total units to be accounted	21,000

Equivalent units

	Direct material	conversion cost
Units completed	14,000	14,000
Ending inventory	7,000	2,800
Equivalent units	21,000	16,800

Ending inventory in material = 7,000 units

Ending inventory in conversion cost

= 7,000 × 40% = 2,800 units

COST PER EQUIVALENT UNITS

Cost per equivalent unit of material

= 1,155,000 / 21,000 = $55

Cost per equivalent unit of conversion cost

= 1,344,000 / 16,800 = $80

COST ALLOCATION

Cost assigned to units completed and transferred out

= (14,000 × 55) + (14,000 × 80) = $1,890,000

Cost assigned to units completed and transferred out is $1,890,000.

Option $1,890,000 is CORRECT.

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