Question

THE Company operates two departments, Department L and
Department Q. THE Company uses a FIFO process costing
system. Department L reported the following inventory
information for June:

                                     % complete    % complete
                            units       DM          conversion 
work in process, June  1    18,000      28%           67%
work in process, June 30    34,000      71%           57%

The cost of beginning work in process and the costs added
during June in Department L were as follows:

                                   DM             Conversion
work in process, June 1         $ 35,240           $ 45,792
costs incurred during June       334,780            175,536

During June, Department L completed 69,000 units and
transferred them to Department Q.

The cost to complete the units in beginning work in
process was equal to:

Group of answer choices

$71,658

$81,032

$28,768

$62,910

$56,142

$77,463

$65,884

$46,890

Answer 1

(d) $62,910

Explanation:

		Material			Conversion
	Units	% of Work Done	Equivalent Units	Units	% of Work Done	Equivalent Units
Work done on Beginning WIP	18,000	72%	12,960	18,000	33%	5,940
Add: Units Started and completed	51,000	100%	51,000	51,000	100%	51,000
Add: Work done on Closing WIP	34,000	71%	24,140	34,000	57%	19,380
Equivalent Units			88,100			76,320

*Units started and completed = Units completed and transferred - Units in Opening WIP i.e. 69,000 - 18,000 = 51,000 units

**% Work done on opening WIP = 1 - Percentage of completion

	Materials	Conversion Cost
Cost incurred during June	$            3,34,780	$            1,75,536
Equivalent Units Worked Upon	88,100	76,320
Cost per Equivalent Unit	$                   3.80	$                   2.30

Cost added to Opening WIP :

Material Cost (18,000 units * 72% * $3.80)	$               49,248
Conversion Cost (18,000 units * 33% * $2.30)	$               13,662
	$               62,910