Materials costs of $1,200,000 and conversion costs of $1,530,000 were charged to
ID: 2332498 • Letter: M
Question
Materials costs of $1,200,000 and conversion costs of $1,530,000 were charged to a processing department in the month of September. Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process. There were no units in beginning work in process, 20,000 units were started into production in September, and there were 5,000 units in ending work in process that were 40% complete at the end of September. What was the total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September?
Explanation / Answer
Solution:
Total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September = $2,250,000
Computation of Equivalent unit of Production Particulars Physical Units Material Conversion Unit completed & Transferred out 15000 15000 15000 Closing WIP: 5000 Material (100%) 5000 Conversion (40%) 2000 Equivalent units of production 20000 20000 17000