Question

A golf ball manufacturer gives us its data for the​ year:

WIP​ Inventory, January 1

0 units

Units started

​9,400 units

Units completed and transferred out

​6,300 units

WIP​ Inventory, December 31

​3,100 units

Direct materials

​$15,178

Direct labor

​$6,600

Manufacturing Overhead

​$5,411

Units in ending WIP Inventory were​ 90% complete for materials and​ 60% complete for conversion costs.

On December​ 31, the total cost of the units in ending WIP would be closest to

A. $4,565

B. $7,393

C. $6,163

D. $9,739

Answer 1

• Correct Answer = Option ‘B’ $ 7,393
• Working

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	2,790	$                      1.67	$             4,659.30
- Conversion	1,860	$                      1.47	$             2,734.20
Total cost of ending WIP				$                 7,393.50

--Related calculations

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	6,300	100%	6,300	100%	6,300
Units of ENDING WIP	3,100	90%	2,790	60%	1,860
Equivalent Units of Production			9,090		8,160
COST per EUP			Material		Conversion
Cost of Beginning WIP			$                          -		$                                                 -
Cost incurred during the period			$          15,178.00		$                                  12,011.00
Total Costs		Costs	$          15,178.00	Costs	$                                  12,011.00
Equivalent units of production		EUP	9,090	EUP	8,160
Cost per EUP			$              1.66975		$                                      1.47194