Question

Use this information about Department G to answer the question that follow.

Department G had 2,040 units 25% completed at the beginning of the period, 12,600 units were completed during the period, 1,700 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:

Work in process, beginning of period	$32,500
Costs added during period:
Direct materials (12,260 units at $9)	110,340
Direct labor	87,010
Factory overhead	37,290

All direct materials are placed in process at the beginning of production, and the first-in, first-out method of inventory costing is used. What is the total cost of 2,040 units of beginning inventory that were completed during the period?

a.$47,800

b.$44,740

c.$32,500

d.$49,500

Answer 1

Correct answer-----------a.$47,800

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion cost	Material	Conversion cost
Beginning WIP	2,040	100%	25%	0%	75%
Units introduced	12,260
Total units to be accounted for	14,300
Completed and Transferred unit	12,600	0%	0%	100%	100%
Ending WIP	1,700	0%	0%	100%	20%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion cost
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	2,040	0%	-	75%	1,530
From units started/Introduced	10,560	100%	10,560	100%	10,560
Total	12,600		10,560		12,090
	Total Units	Material		Conversion cost
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	1,700	100%	1,700	20%	340
Total EUP	14,300		12,260		12,430

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion cost		TOTAL
Cost incurred in Current Period	$ 110,340		$ 124,300		$ 234,640
Total Equivalent Units	12,260		12,430
Cost per Equivalent Units	$ 9.00		$ 10.00		$ 19.00
Cost of Beginning WIP					$ 32,500
Total cost to be accounted for					$ 267,140

.

STEP 4
Cost report [Including Reconciliation]
	Cost of	Units Transferred from beginning Inventory		2040	units
		Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Units Transferred	TOTAL
A	From Beginning WIP:
	Material	-	$ 9.00	$ 0
	Conversion cost	1,530	$ 10.00	$ 15,300	$ 15,300
B	Beginning Inventory cost in earlier period				$ 32,500
C=A+B	Total cost of 2040 units				$ 47800