Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zer

Question

Alpha Company, on March 1, 2017 has a beginning Work in Process inventory of zero. All materials are added into production at the beginning of its production. There is only one production WIP inventory. On March 1, Alpha started into production 10,000 units. At the end of the month there were 5,000 units completed and transferred into the Finished Goods Inventory. The ending WIP was 70% complete with respect to conversion. For the month of March the following cost were incurred and recorded in the WIP:

Direct Material $20,000

Direct Labor 8,000

Factory Overhead 43,000

Alpha uses the weighted- average process costing method. Use this information to determine for the month of March: (Round & enter final answer to the nearest whole dollar.)

1. The total cost transferred to the finished goods inventory

2. The total cost of the ending Work in Process inventory

Explanation / Answer

Equivalent unit of material = 10000

Equivalent unit of conversion = 5000+(5000*70%) = 8500

Cost per equivalent unit of material = 20000/10000 = 2 per unit

Cost per equivalent unit of conversion = 51000/8500 = 6 per unit

1) Total cost of transferred to the finished goods inventory = (2+6)*5000 = 40000

2) Total cost of work in process inventory = (5000*2+3500*6) = 31000

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