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In: Accounting

Last month, Vern’s Assembly Department had a unit materials cost of $4.00 and a unit conversion...

Last month, Vern’s Assembly Department had a unit materials cost of $4.00 and a unit conversion cost of $5.00. The department transferred out 68,000 units during the month and had 12,000 units in ending work in process inventory that were 40% complete with respect to conversion at the end of the month. If all materials are added at the beginning of the process and conversion costs are added uniformly throughout the process, what is the total cost of the department’s ending work in process inventory?

  • A : $612,000

  • B : $48,000

  • C : $72,000

  • D : $24,000

Solutions

Expert Solution

Correct Option C i.e $72,000
Whole Units Equivalent Units Material Equivalent Units Conversion Total
Ending Inventory             12,000                                         12,000                                                 4,800
Unit Cost                                                   4                                                          5
Cost of ending inventory                                         48,000                                               24,000          72,000

ekkarill92 answered 2 years ago
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