Question

The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly line. The costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Townsend Tractor uses weighted average costing. Data for the Assembly Department for April 2019 are: Direct materials equivalent units 1,600 Conversion cost equivalent units 1,550 Ending Work in Process Inventory units: 500 units (50% complete for direct materials and 75% complete for conversion costs) Costs for April: Work in process beginning inventory Direct materials - $230,000 Conversion costs - $220,000 Direct materials costs added during April - $700,000 Conversion costs added during April - $1,175,000 What is the amount of direct materials costs assigned to the ending Work in Process inventory for April? $248,387.10 $145,312.50 $143,750.00 $250,000.00

Answer 1

Total direct materials costs = $230,000 + $700,000 Total direct materials costs = $930,000 Cost per equivalent unit of direct materials = $930,000/1,600 Cost per equivalent unit of direct materials = $581.25 Equivalent units of direct materials for endind work in process inventory = 500 units*50% Equivalent units of direct materials for endind work in process inventory = 250 units Amount of direct materials assigned to ending work in process inventory = 250 units *$581.25 Amount of direct materials assigned to ending work in process inventory = $145,312.50 Hence, the correct option is $145,312.50