Question

Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production of 107,000 gallons of paint in July and completes 82,000 gallons. The costs of the resources used by Sanchez in July consist of the following: Materials Conversion costs 192,775 287,800 (labor and overhead) Required: The production supervisor estimates that the ending work-in-process is 81 percent complete. Compute the cost of paint transferred to finished goods and the amount in work-in-process ending inventory as of July 31. (Do not round intermediate calculations.) $ 262,400 Cost of paint transferred to finished goods Work-in-process ending inventory

Answer 1

Production Start from 107000 gallons

Completed Units = 82000 gallons

Remaining Units (107000-82000)=25000 are 81% compete

Equivalent Unit :-

= Completed Units + (Remaining Units * Completion %)

= 82000 + (25000*81%)

= 82000 + 20250

Total Equivalent Units = 102250 gallons

Total Cost = Material Cost + Conversion Cost

= $192775 + $287800

= $480575

Cost Per Equivalent Unit = Total Cost / Total Equivalent units

= $480575 / 102250

= $4.7 per equivalent unit

Calculation of Cost :-

Particulars	Amount($)
Cost of Paint Transferred to finished goods (82000*$4.7)	385400
Work in Process in ending inventory (20250*$4.7)	95175
Total Cost	480575

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