Answer:
A. $19,100
Explanation:
<u>First, Find the Equivalent Units of Production as Follows :</u>
1. Raw Materials Equivalent Units of Production
Note : Raw Materials are placed at the Beginning of Production
To Finish Beginning Work in Progress 0
Started and Completed (12,000 - 3,600) 8,400
Ending Work In Process (2,000 × 5/5) 2,000
Total Equivalent Units of Production for Raw Materials 10,400
2. Conversion Costs Equivalent Units of Production
Note : Conversion Costs are always incurred evenly during Production
To Finish Beginning Work in Progress (3,600 × 2/3) 2,400
Started and Completed (12,000 - 3,600) 8,400
Ending Work In Process (2,000 × 1/5) 400
Total Equivalent Units of Production for Conversion Cost 11,200
<u>Next, determine the cost per equivalent unit of raw materials and conversion costs.</u>
Raw Materials
Cost per equivalent unit = Total Current year Cost ÷Total Equivalent Units
= $83,200 ÷ 10,400
= $8.00
Conversion Cost
Cost per equivalent unit = Total Current year Cost ÷Total Equivalent Units
= ($62,000 + $24,800) ÷ 11,200
= $7.75
<u>Finally, determine the cost of the departmental work in process inventory using the costs per equivalent units and the respective end in process inventory (equivalent units)</u>
Raw Materials ($8.00 × 2,000) $16,000
Conversion Costs ($7.75 × 400) $3,100
Total Cost $19,100
