A shampoo manufacturer offers the following information: The units in ending WIP inventory were 60% complete for materials and 40% complete for conversion costs.
What is the total cost of units in ending WIP?

Question

A shampoo manufacturer offers the following information:  The units in ending WIP inventory were 60% complete for materials and 40% complete for conversion costs.
What is the total cost of units in ending WIP?

Quizplus · Accepted Answer

To find the total cost of units in ending WIP, we need to separate the total cost into two categories:
1. Cost of completed materials
2. Cost of completed conversion costs

Given that the units in ending WIP inventory were 60% complete for materials and 40% complete for conversion costs, we can use the weighted average method to calculate the cost of completed materials and conversion costs.

Cost of completed materials = (60% * $256,000) = $153,600
Cost of completed conversion costs = (40% * $384,000) = $153,600

Therefore, the total cost of units in ending WIP is:
Total cost = Cost of completed materials + Cost of completed conversion costs
Total cost = $153,600 + $153,600
Total cost = $307,200

The closest answer choice to this value is C) $153,600.

A Shampoo Manufacturer Offers the Following Information: the Units