A disinfectant manufacturer offers the following information: $\begin{array}{|l|r|}
\hline \text { WIP inventory, January 1 } & 0 \text { units } \
\hline \text { Units started } & 21,500 \text { units } \
\hline \begin{array}{l}
\text { Units completed and } \
\text { transferred out }
\end{array} & 14,500 \text { units } \
\hline \text { WIP inventory, December 31 } & 7,000 \text { units } \
\hline \text { Direct materials } & \$ 252,500 \
\hline \text { Direct labor } & \$ 592,500 \
\hline \text { Manufacturing overhead } & \$ 375,100 \
\hline
\end{array}$ The units in ending WIP inventory were 60% complete for materials and 40% complete for conversion costs.
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On December 31,what is the total cost of units completed and transferred?

Question

Quizplus · Accepted Answer

To calculate the total cost of units completed and transferred, we need to consider the cost of units in ending WIP inventory and the cost of units started and completed during the period.

Cost of units in ending WIP inventory:
- Materials = 60% × $633,510 (total material cost of WIP) = $380,106
- Conversion costs = 40% × $416,154 (total conversion cost of WIP) = $166,462
Total cost of units in ending WIP inventory = $380,106 + $166,462 = $546,568

Cost of units started and completed during the period:
- Materials cost = $1,780,000
- Conversion costs = $862,435
Total cost of units started and completed during the period = $1,780,000 + $862,435 = $2,642,435

Total cost of units completed and transferred = $546,568 + $2,642,435 = $3,189,003

Therefore, the best choice is C, which is closest to $3,189,003.

A Disinfectant Manufacturer Offers the Following Information The Units in Ending WIP Inventory Were 60% Complete for WIP