The Completion Department transferred 6,900 units to the finished goods storeroom during a month. There was no beginning work in process inventory, but 1,200 units were still in process at the end of the month which were 55% complete. Inventory unit cost at the end of the month were
$3)50. What were total production costs for the month?

Question

Quizplus · Accepted Answer

The total units accounted for by the Completion Department are the units transferred to the finished goods storeroom plus the units still in process at the end of the month. This gives us 6,900 units transferred + 1,200 units still in process = 8,100 total units. The 1,200 units still in process are 55% complete, so in terms of equivalent whole units, they represent 1,200 units * 55% = 660 equivalent whole units. Therefore, the total equivalent units of production are 6,900 units transferred + 660 equivalent units from the in-process inventory = 7,560 equivalent units. Given that the inventory unit cost is $3.50, the total production costs for the month are 7,560 equivalent units * $3.50 = $26,460.

The Completion Department Transferred 6,900 Units to the Finished Goods