In the Shaping Department of Rollins Company the unit materials cost is $5.00 and the unit conversion cost is $3.00. The department transferred out 40,000 units and had 5,000 units in ending work in process 20% complete. If all materials are added at the beginning of the process, the total cost to be assigned to the ending work in process is:
a) $8,000
b) $25,000
c) $28,000
d) $40,000

The answer is: C

Explanation:

This costing question assesses the stages of completion of inventory during the manufacturing process. The significant point of information is: all materials are added at the beginning of the process, meaning at the end of the period, materials are fully complete, that is, no more materials will be added to the ending work in process. However, the conversion costs are yet to be fully utilised. In this case, equivalent units (partial units computed as completed units for purposes of costing at the end of a financial period) will have  to be calculated to reflect the stage of completion.

Materials cost: 5000 units at 100% completion yields 5000 units for costing

Conversion costs: 5000 units at 20% conversion completion is equal to: 5000*0.2= 1000 equivalent units

The costing calculation for ending work in process is as follows:

Materials cost: 5000 units at $5.00 per unit = $25,000

Conversion cost: 1000 units at $3.00 per unit = $3000

The total cost for ending work in process is the sum of the materials cost and conversion cost = $28,000

answer; correct answer is investing activity;

first one

explanation: