The Painting Department transferred 6,000 units to the finished goods storeroom during a month.There was no beginning work in process inventory,but 800 units were still in process at the end of the month,and were 70% complete,and production costs incurred totaled $21,320.Inventory costs would be determined using a unit cost of

Question

Quizplus · Accepted Answer

To determine the unit cost, we need to calculate the total production cost for the 6,000 units transferred to finished goods as well as the 800 units still in process.

Total production cost = $21,320
Total units produced = 6,000 + 800 = 6,800

To calculate the unit cost, we divide the total production cost by the total units produced:

Unit Cost = Total production cost / Total units produced
Unit Cost = $21,320 / 6,800
Unit Cost = $3.13 (rounded to the nearest cent)

Since the 800 units in process are 70% complete, we need to add the cost of the remaining 30% to the production cost:

Additional cost for 800 units in process = 800 units x 30% x $3.13
Additional cost for 800 units in process = $753.60

Now we can calculate the total cost of all units produced:

Total cost = $21,320 + $753.60
Total cost = $22,073.60

To determine the cost per unit, we divide the total cost by the total units produced:

Cost per unit = Total cost / Total units produced
Cost per unit = $22,073.60 / 6,800
Cost per unit = $3.24 (rounded to the nearest cent)

Therefore, the inventory costs would be determined using a unit cost of $3.25 per unit. Therefore, the answer is choice C.

The Painting Department Transferred 6,000 Units to the Finished Goods