Question

Zee Corporation had 3,600 units one-third completed at the beginning of the period, 12,000 units were...

Zee Corporation had 3,600 units one-third completed at the beginning of the period, 12,000 units were completed and transferred during the period, 2,000 units were one-fifth 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 ($8 per unit for Direct Materials): $37,200

Costs added during period:

Direct materials                $83,200

Direct labor                        62,000

Factory overhead              24,800

Assume that all direct materials are placed in process at the beginning of production and Zee Corporation uses FIFO method of inventory costing.

What is the total cost of the beginning inventory for direct materials?

Select one:

a. $48,600

b. $37,200

c. $45,600

d. $28,800

What is the DM cost/equivalent unit of the period?

Select one:

a. $7.75

b. $8.00

c. $7.00

d. $6.75

Homework Answers

Answer #1
As the materials are added at the beginning of the process, they 100% completed when they are introduced in the process .
Cost of Beginning inventory for direct materials = Beginning inventory units * Fraction completion for direct materials * Direct materials cost per unit = 3600 * 1 * 8 28800 Option d
Unit completed and transferred 12000
(-) Units in beginning work in process 3600
Units started and completed during the period 8400
Direct materials
Units started and completed during the period 8400
(+) Beginning work in process equivalent units [ Beginning work in process units * ( 1 - Fraction completed ) ] 0
(+) Ending work in process equivalent units [ Ending work in process units * Fraction completed ] 2000
Equivalent units of production 10400
Cost added during the period 83200
(/) Equivalent units 10400
DM cost/equivalent unit 8.00 Option b
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