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21 June, 20:13

During May, the number of equivalent units of materials applied to units produced by Department Q totaled 48,000, computed as follows: beginning inventory, 5,000 equivalent units; units started and completed in May, 37,000 equivalent units; and ending inventory, 6,000 equivalent units.

Refer to the information above. Assuming that the cost of direct materials used by Department Q in May was $440,000, the materials cost assigned to unfinished units at May 31 would be: Do not round intermediate calculations

$55,000.

$26,400.

$70,400.

Impossible to determine unless we know the percentage of completion for ending inventory units.

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  1. 21 June, 21:14
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    A. $55,000

    Explanation:

    The question requires us to determine the material cost to be assigned to unfinished units at May 31-

    The assumption: The cost of direct material used by Department Q IN May was $440,000

    Solution:

    Material Cost for unfinished units May 31st

    = Assumed Cost of Direct Materials x (Equivalent units of ending inventory of Materials / Equivalent Units of Materials applied to Units Produced by the Department for the Month)

    = $440,000 x (6,000/48,000 units)

    = $55,000
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