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2 February, 05:57

A golf ball manufacturer gives us its data for the year: WIP Inventory, January 1 Units started Units completed and transferred out WIP Inventory, December 31 Direct materials Direct labor Manufacturing Overhead 0 units 9,500 units 6,400 units 3,100 units $15,478 $7,400 $5,611 Units in ending WIP Inventory were 90% complete for materials and 60% complete for conversion costs. On December 31, the total costs of units completed and transferred would be closest to (Round intermediate calculations to the nearest cent and the final answer to the nearest dollar.) A. $30,964 B. $7,327 c. $10,106 D. $7,629.

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  1. 2 February, 06:21
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    c. $10,106 if taken separately for Direct Material or Conversion Costs

    Or None of these as total cost is $ 10,779+$ 10,081 = $20860 for units transferred out

    Explanation:

    Units % of Eq. Units

    Completion D. M Conversion

    Units completed and

    transferred out 6,400 units 100% 6400 6400

    WIP Inventory, 3,100 units 90%,60% 2790 1860

    December 31

    Total Units to account for 9190 8260

    Direct materials $15,478

    Direct labor $7,400

    Manufacturing Overhead $5,611

    Direct Material Cost per unit = $ 15478/9190 = $ 1.684

    Conversion Cost per unit = $13011 / 8260 = 1.575=$ 1.58

    Direct Material Cost for Completed units = 6400 * $1.684 = $ 10,779

    Conversion Cost for Completed units = 6400 * 1.575 = $ 10,081
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