Answer:
Choice A is the correct answer
Explanation:
Howorth Dental Products
Cost of Production Report
Equivalent Units Materials Conversion Costs
Finished Goods 383000 383000
Ending WIP 19000 6650 ( 19000* 35%)
Total Equivalent Units 402,000 389650
Costs Material D.LAbor FOH
Preceding Department 46,100 25,000 25000
Added 85,800 98,300 98,700
Total Costs 131,900 123,300 123,700
Material Costs Per Equivalent Unit = 131,900/ 402,000= 0.328
Direct LAbor Costs Per Equivalent Unit = 123,300/ 389,650=0.316
FOH Costs Per Equivalent Unit = 123,700/ 389,650=0.317
Total Cost per Equivalent unit = 0.328 + 0.316+0.317= 0.961≅ 0.962 (rounding would give a difference)
Costs Transferred to Finished Goods = 0.962* 383,000= $368,446
Costs OF Ending work in Process = 0.328 * 19,000 + 0.316* 6650 + 0.317 * 6650
Costs of Ending WIP= 6232 +2108.5+ 2101.4= 10,441.9
Total Cost Allocation= 368,446 + 10,441.9= 378,887.9
Equivalent units of direct material 402,000
Equivalent units of direct labor 389,650
Equivalent units of overhead 389,650
Costs per equivalent unit $0.962
Transferred to Finished Goods $368,446
Total Ending Work in Process $10,449
Total Cost Allocation $378,895
There's a minute difference in the WIP ending Inventory Costs ( 10449 - 10441.9 = 7.1)and Total Costs ($378,895-378,887.9= 7.1) which is only due to rounding off. If you round off you will get the exact figures as given in the option.
