Golddust Company manufactures phones in a two- department process: Assembly and Finishing. Information on the Assembly department follows: $\begin{array}{ll}
\text { Direct materials added } & \$ 336,000 \
\text { Direct labor } & 460,800 \
\text { Factory overhead } & \underline{230,200} \
\text { Total costs to account for } & \$ 1,027,200
\end{array}$ There was no beginning inventory, and of the 80,000 units started in production, 67,200 were completed and transferred to the Finishing department, whole 12,800 units were still in process. These units had all materials added but were only 75% complete as far as conversion costs. The ending balance in Work- in- Process Inventory, Assembly is:

Question

Quizplus · Accepted Answer

The ending balance in Work-in-Process Inventory, Assembly is calculated by determining the cost of the units still in process. The cost of materials for these units is $336,000 (since all materials are added), and the conversion costs (direct labor + factory overhead) are 75% complete. Conversion costs = $460,800 + $230,200 = $691,000. 75% of conversion costs for 12,800 units = $691,000 * 0.75 * (12,800/80,000) = $103,680. Total ending WIP = $336,000 * (12,800/80,000) + $103,680 = $140,160.

Golddust Company Manufactures Phones in a Two- Department Process: Assembly