Question

Materials costs of $969000 and conversion costs of $1372500 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 190000 units were started into production in September, and there were 10000 units in ending work in process that were 30% complete at the end of September. What was the total amount of manufacturing costs assigned to the 10000 units in the ending work in process?

$51000.

$22500.

$37800.

$73500.

Answer 1

Correct answer--------------$73,500

Working

Reconciliation of Units
A	Beginning WIP	-
B	Introduced	190,000
C=A+B	TOTAL	190,000
D	Transferred out	180,000
E=C-D	Ending WIP	10,000

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	180,000			100%	180,000	100%	180,000
Ending WIP	10,000			100%	10,000	30%	3,000
Total	190,000			Total	190,000	Total	183,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost (A)				$ 0
Cost incurred during period (B)		$ 969,000	$ 1,372,500	$ 2,341,500
Total Cost to be accounted for (C=A+B)		$ 969,000	$ 1,372,500	$ 2,341,500
Total Equivalent Units(D)		190,000	183,000
Cost per Equivalent Units (E=C/D)		$                   5.10	$                     7.50	$                     12.60

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP		Transferred
		Units	Cost Allocated	Units	Cost Allocated
Material	$ 5.10	10,000	$          51,000.00	180,000	$        918,000.00
Conversion	$ 7.50	3,000	$          22,500.00	180,000	$    1,350,000.00
		TOTAL	$ 73,500	TOTAL	$ 2,268,000