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)

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