Kelly, Inc. uses a weighted-average process costing system that calculates normal rework as 2% of the units passing inspection. The inspection point is at the 75% point and units failing inspection are returned to the 40% point. During the current period, 52,000 units were started; 62,000 units inspected; and 52,000 units completed. Direct material is added at the 50% point and conversion costs occur uniformly. Beginning work in process was 10,000 units, 55% complete and ending work in process was 8,000 units, 85% complete. Costs per equivalent unit for material were $1.00 and $3.00 for conversion costs.
The cost of the goods completed was:
A) $212,030
B) $208,000
C) $210,460
D) $208,328

Question

Quizplus · Accepted Answer

The cost of the goods completed is $212,030.The equivalent units of production are:Direct material: 52,000 units x 50% = 26,000 unitsConversion costs: 52,000 units x 75% = 39,000 unitsThe total cost of production is:Direct material: 26,000 units x $1.00 = $26,000Conversion costs: 39,000 units x $3.00 = $117,000The cost of the goods completed is:$26,000 + $117,000 = $212,030