Question

Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production...

Sanchez & Company produces paints. On July 1, it had no work-in-process inventory. It starts production of 103,000 gallons of paint in July and completes 82,000 gallons. The costs of the resources used by Sanchez in July consist of the following:

Materials $ 285,057

Conversion costs (labor and overhead) 279,300

Required: The production supervisor estimates that the ending work-in-process is 81 percent complete. Compute the cost of paint transferred to finished goods and the amount in work-in-process ending inventory as of July 31. (Do not round intermediate calculations.)

Cost of paint transferred to finished goods

Work-in-process ending inventory

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Homework Answers

Answer #1

Physical units

Equivalent units

production

103000

gallons

completed

82000

gallons

100%

82000

gallons

ending WIP inventory

21000

gallons

81%

17010

gallons

total

99010

gallons

Cost

Beginning WIP

285057

conversion cost

279300

total

564357

cost per unit

=564357/99010

=$5.7 cost per unit

cost of paints transferred to finished goods

=5.7*82000

=467400

WIP ending inventory     

=17010*5.7

=$96957

cost of paints transferred to finished goods

467400

Work-in-process ending inventory

96957
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