Question

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period, 3,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:

Work in process, beginning of period	$40,000
Costs added during period:
Direct materials (10,400 units at $8)	83,200
Direct labor	63,000
Factory overhead	25,000

All direct materials are placed in process at the beginning of production, and the first-in, first-out method of inventory costing is used. What is the total cost of the units started and completed during the period (round unit cost calculations to whole dollars)?

a.$211,200

b.$190,275

c.$20,934

d.$120,060

Answer 1

Solution:

Department G
Computation of Equivalent unit (FIFO)
Particulars	Physical units	Material	Conversion
Units to be accounted for:
Beginning WIP Inventory	3600
Units started this period	10400
Total unit to be accounted for	14000
Units Accounted for:
Units completed and transferred out
From beginning inventory Material - 0% Conversion - 75%	3600	0	2700
Started and completed currently	7400	7400	7400
Units in ending WIP Material - 100% Conversion - 20%	3000	3000	600
Total units accounted for	14000	10400	10700

Department G
Computation of Cost per Equivalent unit
Particulars	Total cost	Material	Conversion
Current period cost	$171,200.00	$83,200.00	$88,000.00
Equivalent units		10400	10700
Cost per equivalent unit		$8.00	$8.22

Cost of units started and completed = 7400 * $8 + 7400*$8.2243 = $120,060

Hence option d is correct.