Question

Department G had 3,600 units 25% completed at the beginning of the period, 11,000 units were completed during the period, 3,000 units were 20% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period:

Work in process, beginning of period	$40,000
Costs added during period:
Direct materials (10,400 units at $8)	83,200
Direct labor	63,000
Factory overhead	25,000

All direct materials are placed in process at the beginning of production, and the first-in, first-out method of inventory costing is used. What is the total cost of the units started and completed during the period (round unit cost calculations to whole dollars)?

a.$211,200

b.$190,275

c.$20,934

d.$120,060

Answer 1

		Equivalent units
	Physical units	Direct materials	Conversion costs
Work in process, beginning of period	3600	0	2700	=3600*(1-25%)
Units started and completed	7400	7400	7400	=11000-3600
Work in process, end of period	3000	3000	600	=3000*20%
Equivalent units of production	14000	10400	10700
	Direct materials	Conversion costs	Total
Costs added during period	83200	88000
Divide by Equivalent units of production	10400	10700
Cost per Equivalent unit of production	8.000	8.224	16.224
Units started and completed	7400
X Cost per Equivalent unit of production	16.224
Cost of the units started and completed	120060
Option D $120,060 is correct