Question

The Cutting Department of the Rock Island Custom Cabinetry Corporation (a process costing production) had no work in process at the beginning of the period, 12,000 units were completed during the period, 1,000 units were 40% completed at the end of the period, and the following manufacturing costs were debited to the Work in Process-Cutting Department during the period:

Direct materials (13,000 lbs. at $6.00/lb.)       $78,000

Direct Labor                                              105,000

Factory Overhead                                       78,000

1. Assuming all direct materials are placed in process at the beginning of production, what is the total cost of the Work in Process-Cutting Department inventory at the end of the period?

a. $6,400

b. $8,400

c. $10,000

d. $4,000

e. $11,000

2. Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the 12,000 units completed in the Cutting Department during the period?

a. $120,000

b. $186,462

c. $192,000

d. $78,000

e. $110,000

Answer 1

Statement of Equivalent production
Particulars	Direct Materials	%completion	Equivalent mat	Conversion	%completion	Equivalent Conv	Total Cost
Opening WIP		100%	-	-	100%	-
Units started and completed	12,000.00	100%	12,000.00	12,000.00	100%	12,000.00
ending WIP	1,000.00	100%	1,000.00	1,000.00	40%	400.00
Equivalent Units			13,000.00			12,400.00
Opening WIP Costs			-			-
Current Month Costs			78,000.00			183,000.00
Total costs			78,000.00			183,000.00
Cost per Equivalent units			6.00			14.76
Ending WIP Units			1,000.00			400.00
Cost of Ending WIP			6,000.00			5,903.23	11,903.23
Units completed and transferred out			12,000.00			12,000.00
Cost of Units completed and transferred out			72,000.00			177,096.77	249,096.77