Department J had no work in process at the beginning of the period, 18,000 units were completed during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (Assuming the company uses FIFO and rounds average cost per unit to two decimal places):
Direct materials (20,000 at $5)
$ 100,000
Direct labor
142,300
Factory overhead
57,200
Assuming that all direct materials are placed in process at the beginning of production, what is the total cost of the departmental work in process inventory at the end of the period?
Answer
$90,000
$283,140
$199,500
$16,438
To find the total cost of the departmental work in process inventory at the end of the period, we need to calculate the cost per unit and multiply it by the number of units in the inventory.
First, let's calculate the cost per unit.
The direct materials cost is given as $100,000 and the number of units is 20,000. Therefore, the cost per unit for direct materials is $100,000 / 20,000 = $5 per unit.
Next, let's calculate the total cost for direct labor and factory overhead by summing them up.
Direct labor cost is $142,300.
Factory overhead cost is $57,200.
The total manufacturing cost is $142,300 + $57,200 = $199,500.
Now, let's calculate the total number of units in the departmental work in process inventory at the end of the period.
We know that 18,000 units were completed during the period and 2,000 units were 30% completed at the end of the period.
So, the number of units in the inventory is 2,000 units x 30% = 600 units.
Finally, let's calculate the total cost of the departmental work in process inventory at the end of the period by multiplying the cost per unit by the number of units in the inventory.
The cost per unit is $199,500 / (18,000 units + 600 units) = $199,500 / 18,600 units ≈ $10.71 per unit.
The total cost of the departmental work in process inventory at the end of the period is $10.71 per unit x 600 units = $6,426.
Therefore, the correct answer is $6,426, which is not one of the provided choices.
To determine the total cost of the departmental work in process inventory at the end of the period, we need to calculate the cost per unit and multiply it by the number of units still in process.
First, let's calculate the cost per unit:
Total direct materials cost = Number of direct materials units * Cost per direct material unit
Total direct materials cost = 20,000 * $5 = $100,000
Next, let's calculate the total manufacturing cost per unit:
Total manufacturing cost per unit = Total manufacturing cost / Number of units
Total manufacturing cost = Direct labor + Factory overhead = $142,300 + $57,200 = $199,500
Total manufacturing cost per unit = $199,500 / 18,000 = $11.08 (rounded to 2 decimal places)
Now, let's calculate the cost of units still in process:
Number of units still in process = 2,000 units
Cost of units still in process = Number of units still in process * Total manufacturing cost per unit
Cost of units still in process = 2,000 * $11.08 = $22,160
Finally, let's calculate the total cost of the departmental work in process inventory:
Total cost of the departmental work in process inventory = Cost of completed units + Cost of units still in process
Total cost of the departmental work in process inventory = (18,000 * $11.08) + $22,160 = $283,140
Therefore, the total cost of the departmental work in process inventory at the end of the period is $283,140. The correct answer is $283,140.