In: Accounting
Department S had no work in process at the beginning of the period. It added 11,600 units of direct materials during the period at a cost of $81,200. During the period, 8,700 units were completed, and 2,900 units were 20% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $50,112, and factory overhead was $27,840. The total cost of units completed during the period was a. $107,880 b. $160,776 c. $133,980 d. $60,900
HERE ANSWER IS C $133980 AS CALCULATED BELOW
STATEMENT OF EQUIVALENT PRODUCTION | |||||
UNITS | MATERIAL | CONVERSION COST | |||
%COMPLETION | EQUIVALENT UNITS | %COMPLETION | EQUIVALENT UNITS | ||
FINISHED AND TRANSFERRED | 8700 | 100 | 8700 | 100 | 8700 |
CLOSING WORK IN PROGRESS | 2900 | 100 | 2900 | 20 | 580 |
TOTAL PRODUCTION | 11600 | 11600 | 9280 | ||
CALCULATION OF COST PER EQUIVALENT UNITS | |||||
Material | Conversion | ||||
cost per equivalent | 2.7 | 5.15 | |||
Detailed calculation is done as following | |||||
STATEMENT OF COST | Material | Conversion | |||
COST ADDED IN THE PROCESS | $ 81,200 | $ 77,952 | $ 159,152 | ||
EQUIVALENT UNITS | 11600 | 9280 | |||
COST PER UNIT=TOTA COST/UNITS | $ 7.00 | $ 8.40 | $ 15.40 | ||
CALCULATION OF COST of UNITS TRANSFERRED OUT | |||||
UNITS | RATE PER UNIT | ||||
VALUE OF OUTPUT TRANSFERRED | 8700 | $ 15.40 | $ 133,980 | ||
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