Blackstein Company manufactures plastic cups in one department.The following information is available: The units in the ending work-in-process inventory are 100 percent complete with respect to direct materials and 50 percent complete with respect to conversion costs.The total cost of units completed and transferred is ________.

Question

Blackstein Company manufactures plastic cups in one department.The following information is available:   The units in the ending work-in-process inventory are 100 percent complete with respect to direct materials and 50 percent complete with respect to conversion costs.The total cost of units completed and transferred is ________.

Quizplus · Accepted Answer

To calculate the total cost of units completed and transferred, we need to first calculate the equivalent units of production for both direct materials and conversion costs.

Direct materials: 
Units completed and transferred = 35,000 
Ending WIP inventory = 5,000 (100% complete) 
Total units = 40,000

Equivalent units of production = Units completed and transferred + (Ending WIP inventory × % complete) 
= 35,000 + (5,000 × 100%) 
= 40,000

Conversion costs: 
Units completed and transferred = 35,000 
Ending WIP inventory = 5,000 (50% complete) 
Total units = 40,000

Equivalent units of production = Units completed and transferred + (Ending WIP inventory × % complete) 
= 35,000 + (5,000 × 50%) 
= 37,500

Next, we need to calculate the total cost incurred during the period. Based on the information given, we know that the cost of direct materials was $180,000 and the conversion costs were $325,200. Therefore, the total cost incurred during the period was:

Total cost = Cost of direct materials + Conversion costs 
= $180,000 + $325,200 
= $505,200

Finally, we can calculate the cost per equivalent unit for both direct materials and conversion costs by dividing the total cost by the respective equivalent units of production:

Cost per equivalent unit of DM = Total cost ÷ Equivalent units of production for direct materials 
= $505,200 ÷ 40,000 
= $12.63

Cost per equivalent unit of CC = Total cost ÷ Equivalent units of production for conversion costs 
= $505,200 ÷ 37,500 
= $13.47

To calculate the total cost of units completed and transferred, we need to multiply the cost per equivalent unit by the equivalent units of production for units completed and transferred:

Total cost of units completed and transferred = Cost per equivalent unit of DM × Units completed and transferred + Cost per equivalent unit of CC × Units completed and transferred 
= ($12.63 × 35,000) + ($13.47 × 35,000) 
= $441,050

Therefore, the answer is B) $411,360.

Blackstein Company Manufactures Plastic Cups in One Department