The mixing department has 20,000 units and $52,000 in costs for which to account.Of the 20,000 units,15,000 were completed and transferred to the next department.The 5,000 remaining were 20% complete for conversion costs.Direct materials are added at the beginning of the process,and the conversion costs are added evenly throughout the process.The cost per equivalent unit is $2.00 for direct materials and $0.75 for conversion costs.
- The total cost of ending WIP is:

Question

Quizplus · Accepted Answer

To calculate the total cost of ending WIP, we need to find the equivalent units for direct materials and conversion costs for the 5,000 units that are 20% complete.

Equivalent units for direct materials = 5,000 units x 20% = 1,000 units
Equivalent units for conversion costs = 5,000 units x 20% = 1,000 units

Total cost for direct materials = $2.00 x 1,000 units = $2,000
Total cost for conversion costs = $0.75 x 1,000 units = $750

Therefore, the total cost of ending WIP is $2,000 + $750 = $2,750.

Adding this to the costs accounted for (i.e. $52,000), we get a total cost of $54,750.

Since only option C has this answer, it is the correct choice.

The Mixing Department Has 20,000 Units and $52,000 in Costs