Matrix Inc. calculates cost for an equivalent unit of production using both the
ID: 342058 • Letter: M
Question
Matrix Inc. calculates cost for an equivalent unit of production using both the weighted-average and the FIFO methods.
Data for July:
Work-in-process inventory, July 1 (36,000 units):
Direct materials (100% completed)
$122,400
Conversion (50% completed)
76,800
Balance in work in process inventory, July 1
$199,200
Units started during July
90,000
Units completed and transferred
102,000
Work-in-process inventory, July 31:
Direct materials (100% completed)
24,000
Conversion (50% completed)
Cost incurred during July:
Direct materials
$180,000
Conversion costs
288,000
The cost of goods completed and transferred out under the weighted-average method is calculated to be:
$96,000
$484,000
$476,400
$571,200
Data for July:
Work-in-process inventory, July 1 (36,000 units):
Direct materials (100% completed)
$122,400
Conversion (50% completed)
76,800
Balance in work in process inventory, July 1
$199,200
Units started during July
90,000
Units completed and transferred
102,000
Work-in-process inventory, July 31:
Direct materials (100% completed)
24,000
Conversion (50% completed)
Cost incurred during July:
Direct materials
$180,000
Conversion costs
288,000
Explanation / Answer
Materials costs Conversion costs Units transferred 102000 102000 Ending work in process 24000 12000 Equivalent units 126000 114000 Total costs 302400 364800 Cost per Equivalent unit 2.40 3.20 Cost of goods completed and transferred out=102000*(2.4+3.2)= $571200 Option 4 is correct