Question

Clarke Manufacturing Company makes a single product that is produced on a continuous basis in one department. All materials are added at the beginning of production. The total cost per equivalent unit in process in March was $6.00, consisting of $4.80 for materials and $1.40 for conversion. During the month, 9,000 units of product were transferred to finished goods inventory; on March 31, 3,500 units were in process, 10 percent converted. The company uses weighted average costing.

Answer 1

Answer:

a- Cost of finished goods= $54000

b- Cost of ending wip =$17290

c- Cost of beginning and total= $71290

Explanation:

The question has three requirements mentioned as follows;

a- Determine the cost of goods transferred to finished goods inventory.

b- Determine the cost of the ending work-in-process inventory.

c- Determine the total cost of the beginning work-in-process inventory plus the current manufacturing costs?

The solutions to each requirement are as follows:

a- cost of finished goods?

The cost of finished goods (9000 units) includes all of the production cost per unit which in this question  is $6.

So the cost of finished goods is =$6×9000

Cost of finished goods= $54000

b- cost of ending work -in-process inventory?

Ending work-in-process inventory are 3500 units of which 10% has been converted. This implies that ending work-in-process inventory would have consumed 100% material but 0% conversion cost since they are under process yet but 10% (i.e 3500×10%=350 units) of the work-in-process have been converted which means only 10% of the work-in-process inventory would have consumed total cost, therefore the cost of ending work-in-process would be:

cost of ending wip inventory= (3500×$4.80) + (350×$1.40)

Cost of ending wip =$17290

c- cost of beginning wip and current manufacturing cost?

Cost of beginning wip and current manufacturing cost would be the total cost of finished stock and ending work-in-process inventory (i.e adding answer of a and b)

cost = $54000+$17290

cost= $71290