The following information is provided by Panther Company: The units were 80% complete for materials and 30% complete for conversion costs.
How much are the total costs to be accounted for during the year?
A)$38,000
B)$50,000
C)$25,100
D)$24,900

Question

The following information is provided by Panther Company:  The units were 80% complete for materials and 30% complete for conversion costs.
How much are the total costs to be accounted for during the year?
A)$38,000 
B)$50,000 
C)$25,100 
D)$24,900

Quizplus · Accepted Answer

To determine the total costs to be accounted for during the year, we need to use the concept of the cost of production report.

Total Units to be accounted for = Units completed and transferred out + Units in ending work in process inventory

Units completed and transferred out are not given. However, we are given that the units were 80% complete for materials and 30% complete for conversion costs. This means that the units were 80% of the way through the production process for materials, and only 30% of the way through for conversion costs. This implies that conversion costs are the bottleneck in the production process, which is causing the units to be completed at a slower pace.

Using this information, we can calculate the equivalent units of production for the year as follows:

Materials = 11,000 x 80% = 8,800
Conversion costs = 11,000 x 30% = 3,300

Therefore, the total units to be accounted for during the year are:

Total units = Units completed and transferred out + Units in ending work in process inventory

Units in ending work in process inventory are not given, so we cannot calculate this directly. However, we know that 11,000 units were started during the year, and we can assume that some of these units are still in process at the end of the year. Therefore, the total units to be accounted for must be greater than or equal to 11,000.

The only answer choice that is greater than or equal to 11,000 is B. Therefore, the correct answer is B.

The Following Information Is Provided by Panther Company: the Units