Question

The Morgan Models company manufacturers replica plastic airplane and motorized vehicle models. During October, the firm's Assembly Department started production of 60,000 models. During the month, the firm completed 66,000 models, and transferred them to the Finishing Department. The firm ended the month with 22,000 models in ending inventory. There were 28,000 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Morgan. Beginning work in process was 25% complete as to conversion costs, while ending work in process was 50% complete as to conversion costs.

Beginning inventory:
Direct materials costs $39,200
Conversion costs $30,800

Manufacturing costs added during the accounting period:
Direct materials costs $90,000
Conversion costs $280,000


What is the amount of direct materials cost assigned to ending work-in-process inventory at the end of October?

Answer 1

	Direct materials
To complete beginning inventory	0
Units started and completed	38000	=66000-28000
Ending inventory	22000
Equivalent units	60000
Direct materials costs added	90000
/ Equivalent units	60000
Direct materials cost per Equivalent unit	1.5
Ending inventory equivalent units	22000
X Direct materials cost per Equivalent unit	1.5
Amount of direct materials cost assigned to ending work-in-process inventory	33000