Information for the current month for Process D is shown below. $\begin{array}{lrl}
&\text { Direct Materials }&\text { Conversion Costs }\
\text { Beginning work in process } & \$ 4,600 & \$ 9,600 \
\text { Current month's costs } &31,740 & 51,100\
\text {Equivalent units based on the FIFO}\
\text {costing method}&69,000&70,000
\end{array}$

Direct materials are added at the beginning of the process.Beginning work in process is 50 percent complete as to conversion costs; ending work in process inventory is 40 percent complete.Determine the cost of ending work in process inventory.

Question

Information for the current month for Process D is shown below. $\begin{array}{lrl}
&\text { Direct Materials }&\text { Conversion Costs }\
\text { Beginning work in process } & \$ 4,600 & \$ 9,600 \
\text { Current month's costs } &31,740 & 51,100\
\text {Equivalent units based on the FIFO}\
\text {costing method}&69,000&70,000
\end{array}$
 
Direct materials are added at the beginning of the process.Beginning work in process is 50 percent complete as to conversion costs; ending work in process inventory is 40 percent complete.Determine the cost of ending work in process inventory.

Quizplus · Accepted Answer

The cost of ending work in process inventory is calculated using the equivalent units and costs per equivalent unit. For conversion costs, the ending inventory is 40% complete, so the equivalent units for conversion costs are 40% of the ending inventory. The cost per equivalent unit for conversion costs is $51,100 / 70,000 = $0.73. The cost per equivalent unit for direct materials is $31,740 / 69,000 = $0.46. The cost of ending work in process is calculated as: (Direct Materials Equivalent Units * Cost per Equivalent Unit) + (Conversion Costs Equivalent Units * Cost per Equivalent Unit).

Information for the Current Month for Process D Is Shown