Department S had no work in process at the beginning of the period. It added 13,600 units of direct materials during the period at a cost of $95,200; 10,200 units were completed during the period; and 3,400 units were 20% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $56,500 and factory overhead was $8,600. The total cost of units completed during the period was

The total cost of units completed during the period was $132,396

Explanation:

Step 1 Calculate the Cost incurred during the process in respect to Raw Materials and Conversion Costs

Raw Materials:

Opening Work in Progress                 0

Add Started During the year          95200

Total Raw Materials Cost               95,200

Conversion Costs:

Opening Work in Progress                                              0

Add Started During the year (56500+8600)            65,100

Total Conversion      Cost                                           65,100

Step 2 Calculate the total equivalent units in respect of Raw Materials and Conversion Costs at the close of the process

Raw Materials:

Completed-100%                                    10200

Closing Work In Progress - 100%            3400

Total equivalent Units - Raw Materials  13600

Raw Materials are added at the beginning of the process so they are 100% complete for both the Closing Work In Progress and Completed units

Conversion Costs:

Completed-100%                                           10200

Closing Work In Progress - 20%                      680

Total equivalent Units - Conversion Costs  10880

Conversion Costs are added evenly during the process so they are 100% complete for Completed Units and 20% for Closing Work in process.

Step 3 Calculate Total Equivalent Cost per unit

Raw Materials = Total Cost / Total Equivalent units

                         = $95,200 /13600

                         =$7.00

Conversion Costs = Total Cost / Total Equivalent units

                         = $65,100 /10880

                         =$5.98

Total Equivalent Cost per unit = 12.98

The total cost of units completed during the period was

=10200×$12.98

=$132,396

$132,431.25

Explanation:

In order to calculate the cost of finished products, we must first determine the equivalent units remaining as work in progress (WIP)

ending inventory: 3,400 equivalent units for raw material (= 3,400 x 100%) and 680 equivalent units for conversion costs (= 3,400 x 20%).

cost of finished units:

materials = (10,200 / 13,600) x $95,200 = $71,400

direct labor = {10,200 / (680 + 10,200)} x $56,500 = $52,968.75

overhead = {10,200 / (680 + 10,200)} x $8,600 = $8,062.50

total cost = $132,431.25