The activity for Noah Company's mixing department for August is given below.All material is added at the beginning of the process. Compute the cost of Noah's completed units.

Question

The activity for Noah Company's mixing department for August is given below.All material is added at the beginning of the process.  Compute the cost of Noah's completed units.

Quizplus · Accepted Answer

Total cost incurred in the mixing department =

Direct materials cost (400,000 gallons × $1.20 per gallon) = $480,000

Conversion cost (72,000 labor hours × $10 per hour) = $720,000

Total cost = $1,200,000

Total equivalent units = 40,000 + 20,000 = 60,000 units

Cost per equivalent unit = $1,200,000 ÷ 60,000 units = $20 per unit

Cost of completed units = 30,000 units × $20 per unit = $600,000

Therefore, the correct choice is C, $576,000, as it is the closest option to $600,000.

The Activity for Noah Company's Mixing Department for August Is