Answer:
18261
Explanation:
The first <u>key-point</u> will be that materials are applied entirely at the begining of the production so this part of the cost is quite easy:
You have an ending inventory of 1,700 units and then you have a given data of $9 per unit for direct materials so mulitply those to get:
ending inventory $15,300 materials cost
<u>Next part</u> will be to calculate the conversion cost.
<u />
<u>First step, </u>will be to calculate the conversion cost for the period,
which is direct labor + factory overhead:
78,600 + 26,200 = 104,800
Remember conversion cost = labor + overhead
<u>Second,</u> calculate the equivalent units:
Here we have the data for completed units so we work it like this
<em>Complete units</em> 12200
(this are finished o they count entirely)
<em>+ ending units x percent of completion </em> 1700 x 20% = 340
(this are units we work during this period)
<em>- beginning units x percent of completion </em> (2040) x 5% = (510)
(this are units we don't work on this period,
they are from the previous month,
so we subtract them)
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Equivalent units for conversion cost 12030
<u>Third,</u> we are almost there, we will divide this two to get the value of 1 unit of conversion cost
104,800 conversion cost / 12,030 equivalent units = 8.7115 CC per unit
<u>Fourth,</u> calculate the conversion cost for the ending inventory
conversion cost per unit x equivalent units of ending inventory
8.7115 x 340 = 2961
<u>Last Step,</u> we add the materials cost with the conversion cost
15,300 + 2,961 = 18261 VALUE OF ENDING INVENTORY
