Question

In: Accounting

. Black Company manufactures gadgets in one department. The following information is available: Work-In-Process Inventory, beginning                    &n

  1. . Black Company manufactures gadgets in one department. The following information is available:

Work-In-Process Inventory, beginning                               0

Units started                                                                   60,000

Units completed and transferred                                48,000

Work-In-Process Inventory, end                                 12,000

Direct materials added                                             $240,000

Direct labor                                                                 $164,780

Factory overhead                                                         $82,000

The units in the ending Work-In-Process Inventory are 0 percent complete with respect to direct materials and 50 percent complete with respect to conversion costs. Direct materials are added at the end of the process. The total cost of units completed and transferred is ________.

A) $90,240

B) $411,360

C) $459,360

D) $488,400

Solutions

Expert Solution

Answer:

Option C: $ 459,360

Calculation:

Particulars Output Material Conversion cost
% Units % Units
Started and completed 48,000 100% 48,000 100% 48,000
Ending Inventory 12,000 0%           -   50%     6,000
Total 60,000 48,000 54,000
Current period $        240,000 $        246,780
Total $        240,000 $        246,780
Cost per unit $              5.00 $              4.57

Note:

Value of Started and completed
Material (5 * 48000) $ 240,000.00
Conversion cost (4.57 * 48000) $ 219,360.00
Total $ 459,360.00

Hence,

Option 'C' is correct and rest all are incorrect.

In case of any doubt, please feel free to comment.

ekkarill92 answered 2 years ago
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