Materials costs of $800,000 and conversion costs of $1,020,000 were charged to a processing department in the month of September.Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process.There were no units in beginning work in process, 20,000 units were started into production in September, and there were 5,000 units in ending work in process that were 40% complete at the end of September.
-What was the total amount of manufacturing costs assigned to the 5,000 units in the ending work in process?

Question

Materials costs of $800,000 and conversion costs of $1,020,000 were charged to a processing department in the month of September.Materials are added at the beginning of the process, while conversion costs are incurred uniformly throughout the process.There were no units in beginning work in process, 20,000 units were started into production in September, and there were 5,000 units in ending work in process that were 40% complete at the end of September. 
-What was the total amount of manufacturing costs assigned to the 5,000 units in the ending work in process?

Quizplus · Accepted Answer

The total manufacturing costs for the ending work in process include all materials costs and a portion of the conversion costs. Materials costs for 5,000 units are $200,000 (5,000 units x $40 per unit). Conversion costs for 5,000 units at 40% completion are $120,000 (5,000 units x $51 per unit x 40%). Total costs are $320,000.

Materials Costs of $800,000 and Conversion Costs of $1,020,000 Were