Question

For the Mixing Department, unit materials cost is $8 and unit conversion cost is $12. If materials are added at the beginning of the process and there are 6,000 units in the ending work-in process which are 75% complete as to conversion costs, what are the costs that should be assigned to the ending work-in process inventory? a) 102,000. b) $120,000. c) $108,000. d) $90,000.

Answer 1

Answer: Option (a) is correct.

Explanation:

Materials Costs = Units × Unit Material Cost

                          = 6,000 × $8

                          = $48,000

Conversion costs = Units × Percentage Complete × Unit Conversion Cost

                             = 6,000 × 75% × $12

                             = $54,000

Ending Work-In Process Inventory:

= Materials Costs  + Conversion Costs

= $48,000 + $54,000

=  $102,000