Equivalent Units Equivalent Units Direct Materials Labor and Overhead Beginning
ID: 2562453 • Letter: E
Question
Equivalent Units
Equivalent Units
Direct Materials
Labor and Overhead
Beginning WIP
0
1,500
Units started and
Completed
18,000
18,000
Ending WIP
2,000
1,600
Total
20,000
21,100
Refer to Figure 1. Assume that cost per equivalent unit of direct materials equals $10.00 per unit and that the combined cost per equivalent unit of direct labor and factory overhead equals $20.00 per unit. Also assume that prior period beginning work in process costs total $10,000. Costs to complete beginning work-in-process using the FIFO method would equal
A. $30,000
B. $45,000
C. $4,000
D. 0
E. $15,000
Equivalent Units
Equivalent Units
Direct Materials
Labor and Overhead
Beginning WIP
0
1,500
Units started and
Completed
18,000
18,000
Ending WIP
2,000
1,600
Total
20,000
21,100
Explanation / Answer
Answer is A. $ 30,000
The explanation is as follows:
Equivalent units applied on opening WIp during ther current month
Material Nil
Labour +Overhead 1500 equivalent units
And Conversion cost (labour and overhead) per equivalent unit is $ 20 per equivalent unit
Therefore, the cost incurred on Opening WIP during the current month to complete:
Material Nil
Add: Labour and overhead cost(1500 equivalent units@20) $ 30,000
Total cost to complete Opening Wip during curret month $ 30,000
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.