Materials costs of $1003000 and conversion costs of $1134360 were charged to a p
ID: 2391841 • Letter: M
Question
Materials costs of $1003000 and conversion costs of $1134360 were charged to a processing department in the month of September. All 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, 170000 units were started into production in September, and there were 8000 units in ending work in process that were 30% 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
Unit transferred out = 170000-8000 = 162000 units
equivalent unit of material = 170000
Equivalent unit of conversion = 162000+(8000*30%) = 164400 Unit
Cost per equivalent unit of material = 1003000/170000 = 5.9
Cost per equivalent unt of conversion = 1134360/164400 = 6.9
Total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September = (5.9+6.9)*162000 = $2073600
So answer is a) $2073600