In the month of April a department had 500 units in the beginning work in process inventory that were 60% complete. These units had $60000 of materials costs and $45000 of conversion costs. Materials are added at the beginning of the process and conversion costs are added uniformly throughout the process. During April 10000 units were completed and transferred to the finished goods inventory and there were 2000 units that were 25% complete in the ending work in process inventory on April 30. During April manufacturing costs charged to the department were: Materials $1380000; Conversion costs $1 530000. The cost assigned to the units transferred to finished goods during April was
A) $2700000.
B) $2715000.
C) $2820000.
D) $2685000.

Question

Quizplus · Accepted Answer

The cost assigned to the units transferred to finished goods during April is the sum of the costs of the units in the beginning work in process inventory, the costs added during April, and the costs of the units in the ending work in process inventory.The costs of the units in the beginning work in process inventory are:Materials: $60000 x 60% = $36000Conversion costs: $45000 x 60% = $27000The costs added during April are:Materials: $1380000Conversion costs: $1530000The costs of the units in the ending work in process inventory are:Materials: $1380000 x 25% = $345000Conversion costs: $1530000 x 25% = $382500Therefore, the cost assigned to the units transferred to finished goods during April is:$36000 + $27000 + $1380000 + $1530000 + $345000 + $382500 = $2715000

In the Month of April a Department Had 500 Units