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11 February, 10:49

A Company manufactures clay molded pottery on an assembly line. Its standard costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Molding Department and the Finishing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Data for the Assembly Department for August 2017 are: Work in process, beginning inventory: 3000 units Direct materials (100% complete) Conversion costs (40% complete) Units started during August 695 units Work in process, ending inventory: 500 units Direct materials (100% complete) Conversion costs (65% complete) Costs for August: Standard costs for Assembly: Direct materials $15 per unit Conversion costs $35.50 per unit Work in process, beginning inventory: Direct materials $12,400 Conversion costs $9450 What is the balance in ending work-in-process inventory

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  1. 11 February, 11:04
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    Ending work-in-process inventory is $19,037.50

    Explanation:

    First Determine the Equivalent Units in ending work-in-process inventory in terms of direct materials and conversion costs

    Direct materials (500 units * 100%) = 500 units

    Conversion costs (500 units * 65%) = 325 units

    Then determine the Value of ending work-in-process inventory

    Direct materials (500 units * $15) = $ 7,500.00

    Conversion costs (325 units * $35.50) = $ 11,537.50

    Total = $19,037.50

    Conclusion

    Therefore, ending work-in-process inventory is $19,037.50
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