Question

Department S had no work in process at the beginning of the period. 13,934 units of direct materials were added during the period at a cost of $97,538, 10,451 units were completed during the period, and 3,483 units were 36% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $51,257 and factory overhead was $8,903.
What were the total cost of units completed during the period?

Select the correct answer.

$157,698
$126,872
$30,826
$97,538

Answer 1

Answer:

Option (B) is correct.

Explanation:

Equivalent units of production(EUP) - Materials:

= Transferred out + Ending balance

= 10,451 units × 100% + 3,483 units × 100%

= 10,451 + 3,483

= 13,934

Equivalent units of production(EUP) - conversion:

= Transferred out + Ending balance

= 10,451 units × 100% + 3,483 units × 36%

= 10,451 + 1,253.88

= 11,704.88

Material cost = $\frac{Cost\ of\ direct\ material}{EUP\ material}\times units\ transferred\ out$

Material cost = $\frac{97,538}{13,934}\times 10,451$

                      = 73,157

Conversion cost = $\frac{Direct labor+overhead}{EUP\ conversion}\times units\ transferred\ out$

Conversion cost = $\frac{51,257+8,903}{11,705}\times 10,451$

Conversion cost = $\frac{60,160}{11,705}\times 10,451$

                            = 53,715

Therefore,

Total cost of units completed during the period(10,451 units):

= Material cost + Conversion cost

= 73,157 + 53,715

= 126,872