Question

Department A had 4,600 units in Work in Process that were 74% completed at the beginning of the period at a cost of $6,100. During the period, 32,500 units of direct materials were added at a cost of $74,750 and 34,400 units were completed. At the end of the period, 2,700 units were 39% completed. All materials are added at the beginning of the process. Direct labor was $27,700, and factory overhead was $5,100. The cost of the 2,700 units in process at the end of the period if the first-in, first-out method is used to cost inventories was

a.$7,288 b.$6,749 c.$6,210 d.$8,366

Answer 1

Correct answer-----------a.$7,288

Working

STEP 1 (FIFO)
Reconciliation of Units
	Units	% already completed		% completed this period
		Material	Conversion	Material	Conversion
Beginning WIP	4,600	100%	74%	0%	26%
Units introduced	32,500
Total units to be accounted for	37,100
Completed and Transferred unit	34,400	0%	0%	100%	100%
Ending WIP	2,700	0%	0%	100%	39%

.

STEP 2 (FIFO)
Equivalent Units
	Total Units	Material		Conversion
Units Transferred:		% completed this period	Equivalent Units	% completed this period	Equivalent Units
From WIP	4,600	0%	-	26%	1,196
From units started/Introduced	29,800	100%	29,800	100%	29,800
Total	34,400		29,800		30,996
	Total Units	Material		Conversion
Ending WIP		% completed this period	Equivalent Units	% completed this period	Equivalent Units
Total	2,700	100%	2,700	39%	1,053
Total EUP	37,100		32,500		32,049

.

STEP 3
Cost per Equivalent Units AND Cost to be accounted for
	Material		Conversion		TOTAL
Cost incurred in Current Period	$ 74,750		$ 32,800		$ 107,550
Total Equivalent Units	32,500		32,049
Cost per Equivalent Units	$ 2.300		$ 1.02		$ 3.32
Cost of Beginning WIP					$ 6,100
Total cost to be accounted for					$ 113,650

Step 4

Cost of	Ending WIP		2,700.00	units
	Equivalent Units [Step 2]	Cost per Equivalent Units [Step 3]	Cost of Ending WIP	TOTAL
Material	2,700	$ 2.30	$ 6,210
Conversion	1,053	$ 1.02	$ 1,078
Total Cost of Ending WIP				$ 7,288