The ledger of American Company has the following work in process account. Work i
ID: 2610985 • Letter: T
Question
The ledger of American Company has the following work in process account.
Work in Process—Painting
Production records show that there were 420 units in the beginning inventory, 30% complete, 1,680 units started, and 1,530 units transferred out. The beginning work in process had materials cost of $2,440 and conversion costs of $1,250. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.
What is the total cost of units transferred out in May? (Round answer to 0 decimal places, e.g. 1,225.)
Work in Process—Painting
5/1 Balance 3,690 5/31 Transferred out ? 5/31 Materials 7,070 5/31 Labor 3,230 5/31 Overhead 1,680 5/31 Balance ?Explanation / Answer
Work in process, May 31 = 420+1680-1530= 570 Equivalent units for materials = 1530+570= 2100 The unit materials cost for May =(7070+2440)/2100= 4.529 Equivalent units for conversion = 1530+(570*40%)= 1758 The unit materials cost for May =(3230+1680+1250)/1758= 3.504 The total cost of units transferred out in May=1530*(4.529+3.504)= 12290
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