Question

Department G had 2,160 units 25% completed at the beginning of the period, 12,200 units were completed during the period, 1,800 units were 20% completed at the end of the period, and the following manufacturing costs debited to the departmental work in process account during the period: Work in process, beginning of period $33,100 Costs added during period: Direct materials (11,840 units at $9) 106,560 Direct labor 72,600 Factory overhead 24,200 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 2,160 units of beginning inventory which were completed during the period (round unit cost calculations to four decimal places and round your final answer to the nearest dollar)? a. $46,146 b. $43,537 c. $33,100 d. $47,946

Answer 1

Total Cost of Beginning Inventory (2160 units) (FIFO)

All direct materials are placed in process at the beginning of production

Hence in the current period only Direct Labour & Factory O/H cost were added to Beginning WIP

Equivalent units for Labour & Factory O/H :-

Beginning WIP (2160 * 75%)	1620
(+) Units started & completed this period (12200 – 2160)	10040
(+) Ending WIP (1800 * 20%)	360
Equivalent units for Labour & Factory O/H	12020

Total cost of Beginning Inventory :-

Cost of Beginning WIP	33100
(+) Cost incurred in current period related to Beginning Inventory       (72600 + 24200)/12020 * 1620	13046
Total cost of Beginning Inventory	46146

Option (A) is correct i.e 46146