Department A had 1,000 units in Work in Process that were 60% completed at the beginning of the period at a cost of $7,000. During the period, 4,000 units of direct materials were added at a cost of $8,200, and 4,500 units were completed. At the end of the period, 500 units were 40% completed. All materials are added at the beginning of the process. Direct labor was $28,700 and factory overhead was $4,510. The cost of the 500 units in process at the end of the period if the first-in, first-out method is used to cost inventories was:

The total cost at the ending of the given process is $2,645.

Total direct material = 1000 + 3500 - 500                                                   Total direct material = $4,000                              

Conservation cost = $4,100

Direct material cost per unit = $8,200 / 4,000

Direct material cost per unit = $2.05

Total conversion cost = $28,700 + $4,510

Total conversion cost = $33,210

Conversion costs per unit = $33,210 / 4,100

Conversion costs per unit = $8.1

Direct material Units completed = [3,500 × 2.05] + 7,000

Direct material Units completed = 14,175

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Answer :

The cost at the end of process = $2,645

Explanation :

As per the data given in the question,

                                              Direct material               Conversion cost

Particulars              I/P            Particulars           O/P              %       Units                   %          Units

Opening WIP       1,000       Units completed    1,000           0%         0                      40%      400

Units introduced  4,000       units completed    3,500          100%      3,500                100%    3,500

Closing WIP         500            100%      500                   40%      200

Total                                                   4,000                              4,100

The I/P = Input

O/P = Output

Particulars                         Cost                Equivalent unis              Cost per unit

Direct material                 $8,200                     4,000                            $2.05                  ($8,200 ÷ 4,000)

Conversion costs             $33,210                    4,100                           $8.10                  ($33,210 ÷ 4,100)

(Conversion cost  = 28,700 + 4,510 = 33,210)

Particulars                   Units completed               Closing WIP

Direct material                    $14,175                           $1,025

                                                                    (500 units × $2.05)

Conversion costs                $28,350                          $1,620                                              (3,500 units × $8.10)                                              (200 units × $8.10)

     Total                              $42,525                         $2,645

(Direct material Units completed = 3,500*2.05+7,000 = 14,175)

1) the stages a new product goes through from beginning to end, i.e., the stages that a product passes through from introduction through growth, maturity, and decline. 2) the time from initial research and development to the time at which sales and support of the product to customers are withdrawn. 3) the period of time during which a product can be produced and marketed profitably.

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