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8 April, 17:41

A manufacturing department completed and transferred to finished goods a total of 50,000 units. They also had 2,500 units in ending work in process inventory. Of this ending inventory, direct materials were 60% complete and conversion costs were 20% complete. Their cost per EUP for direct materials is $5.75 and $1.25 for conversion cost. The cost of units completed this period is $.

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  1. 8 April, 20:48
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    The cost of units completed this period is $ 350,000

    Explanation:

    Units Out of the Process Were:

    Finished Goods = 50,000

    Ending Work In Progress = 2500

    1.) Finished Goods Equivalent Units

    Materials : Finished Goods are 100% complete in terms of materials hence 50000 equivalent units

    Conversion : Finished Goods are 100% complete in terms of conversion costs hence 50000 equivalent units

    2.) Cost of units completed Units

    Materials : 50000 * 5.75 = 287500

    Conversion : 50000*1.25 = 62500

    Total = 287500 + 62500 = $ 350,000

    *Note Ending Inventory is not relevant for this question
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