Answer:
Finished Goods $2,664,000 (debit)
Work In Process $2,664,000 (credit)
Explanation:
The First step is to determine the Equivalent units of Production
<u>Direct Materials</u>
Units Completed and Transferred 22,200
Units of Ending Work In Process 2,400
Total 24,600
<u>Conversion Costs</u>
Units Completed and Transferred 22,200
Units of Ending Work In Process at 80% 1,920
Total 24,120
The Next step is to determine the Total Cost incurred during the period in respect to Direct Materials and Conversion.
<u>Direct Materials</u>
Cost in Opening Work In Process $19,800
Add during the Period $496,800
Total $516,600
<u>Conversion Costs</u>
Cost in Opening Work In Process $221,940
Add during the Period $2,165,940
Total $2,387,880
Then determine the Total Equivalent Unit Cost of Production.
Equivalent Unit Cost = Total Cost / Total Equivalent Units.
Direct Materials ( $516,600 / 24,600) = $21.00
Conversion Cost ( $2,387,880 / 24,120) = $99.00
Total Equivalent Unit Cost = $120.00
Finally determine the Cost of units Completed and Transferred.
Cost of units Completed and Transferred = Number of units × Total Equivalent Unit Cost
= 22,200 × $120.00
= $2,664,000
Journal Entry to transfer the cost of completed units to finished goods inventory.
Finished Goods $2,664,000 (debit)
Work In Process $2,664,000 (credit)