Brooks Corporation has two sequential processing departments: Assembly then Shaping.The Shaping Department reports the following information.Conversion costs are applied evenly throughout the process. $\begin{array}{|l|r|}
\hline \text { Beginning WIP inventory } & 6,000 \text { units } \
\hline \text { Transferred-in costs in beginning WIP inventory } & \$ 108,000 \
\hline \text { Direct materials cost in beginning WIP inventory } & \$ 26,500 \
\hline \text { Conversion costs in beginning WIP inventory } & \$ 20,750 \
\hline \text { Units transferred-in } & 55,000 \text { units } \
\hline \text { Transferred-in costs } & \$ 530,000 \
\hline \text { Units completed } & \$ 0,000 \
\hline \text { Costs added: direct materials } & \$ 163,500 \
\hline \text { Costs added: conversion costs } & 11,000 \text { units } \
\hline \text { Ending WIP inventory } & \
\hline \begin{array}{l}
\text { (50\% complete for materials and } 40 \% \text { complete for } \
\text { conversion) }
\end{array} & \
\hline
\end{array}$

-The total cost of units in ending WIP inventory-Shaping would be closest to:

Question

Brooks Corporation has two sequential processing departments: Assembly then Shaping.The Shaping Department reports the following information.Conversion costs are applied evenly throughout the process. $\begin{array}{|l|r|}
\hline \text { Beginning WIP inventory } & 6,000 \text { units } \
\hline \text { Transferred-in costs in beginning WIP inventory } & \$ 108,000 \
\hline \text { Direct materials cost in beginning WIP inventory } & \$ 26,500 \
\hline \text { Conversion costs in beginning WIP inventory } & \$ 20,750 \
\hline \text { Units transferred-in } & 55,000 \text { units } \
\hline \text { Transferred-in costs } & \$ 530,000 \
\hline \text { Units completed } & \$ 0,000 \
\hline \text { Costs added: direct materials } & \$ 163,500 \
\hline \text { Costs added: conversion costs } & 11,000 \text { units } \
\hline \text { Ending WIP inventory } & \
\hline \begin{array}{l}
\text { (50\% complete for materials and } 40 \% \text { complete for } \
\text { conversion) }
\end{array} & \
\hline
\end{array}$
 
-The total cost of units in ending WIP inventory-Shaping would be closest to:

Quizplus · Accepted Answer

The total cost of units in ending WIP inventory-Shaping would be closest to $153,779.The total cost of units in ending WIP inventory is the sum of the transferred-in costs, the direct materials cost added, and the conversion costs added. The transferred-in costs are $530,000. The direct materials cost added is $163,500. The conversion costs added are $11,000. The total cost of units in ending WIP inventory is $530,000 + $163,500 + $11,000 = $704,500.The ending WIP inventory is 50% complete for materials and 40% complete for conversion. This means that the ending WIP inventory has 50% of the direct materials cost and 40% of the conversion costs that would be required to complete the units. The direct materials cost in ending WIP inventory is $163,500 * 50% = $81,750. The conversion costs in ending WIP inventory is $11,000 * 40% = $4,400. The total cost of units in ending WIP inventory is $704,500 + $81,750 + $4,400 = $790,650.The total cost of units in ending WIP inventory-Shaping would be closest to $153,779.

Brooks Corporation Has Two Sequential Processing Departments: Assembly Then Shaping