Question

Lopez coffee roasts and packs coffee beans. The coffee is roasted in the Roasting Department and transferred to the Packing Department and prepared for shipment. Roasting Department data for the month os October is as follows:

Beginning WIP inventory (2,300 units, 60% complete) $46,368

Direct materials (coffee beans) requested for roasting (26,000 units) 429,000

Direct labor for the month 100,560

FOH for the month 48,480

Beans completed and transferred (25,700 units) Solve

Ending WIP inventory ( ______units, 20% complete) Solve

What is the cost of the 25,700 units of coffee beans completed and transferred to the Packing Department? (Show all work for full credit)

Answer 1

Ending WIP inventory:

Units in beginning WIP	2,300
Units started	26,000
Units completed and transferred	-25,700
Units in ending WIP	2,600

		Equivalent Units
	Whole units	Direct material	Conversion
Beginning WIP	2,300	0	920 (2,300*40%)
Started and completed (25,700-2,300)	23,400	23,400	23,400
Ending WIP	2,600	2,600	520 (2,600*20%)
Total	28,300	26,000	24,840

	Direct materials	Conversion
Cost added during the month	$429,000	$149,040
Equivalent units	26,000	24,840
Cost per equivalent unit	$16.5	$6

Cost of units completed and transferred out:

Beginning WIP:
Beginning balance	$46,368
Add: Cost added during the month (920*$6)	5,520	$51,888
Cost of units started and completed (23,400*$22.5)		526,500
Total cost of units completed and transferred		$578,388