Q.18-10SE - Horngren'S Financial And Managerial Accounting

Question

Question: Refer to Short Exercises S18-8 and S18-9. Use Complete Foods’s costs per equivalent unit of production for direct materials and conversion costs that you calculated in Short Exercise S18-9.

Calculate the cost of the 38,000 units completed and transferred out and the

24,000 units, 20% complete, in the ending Work-in-Process Inventory.

Step-by-Step Solution

Answer

Answer:

The cost of 38,000 units completed and transferred out is $49,400 and the cost of 24,000 units is $31,200.

Step 1: Cost of 38,000 units completed and transferred out

$$\begin{gathered} \mathit{C}\mathit{o}\mathit{s}\mathit{t}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{c}\mathit{o}\mathit{m}\mathit{p}\mathit{l}\mathit{e}\mathit{t}\mathit{e}\mathit{d}\mathbf{ }\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathit{s}\mathbf{ }\mathbf{=}\mathbf{Equalent}\mathbf{ }\mathbf{unit}\mathbf{ }\mathbf{of}\mathbf{ }\mathbf{production}\mathbf{\times }\mathbf{(}\mathbf{cost}\mathbf{ }\mathbf{of}\mathbf{ }\mathbf{direct}\mathbf{ }\mathbf{material}\mathbf{+}\mathit{C}\mathit{o}\mathit{n}\mathit{v}\mathit{e}\mathit{r}\mathit{s}\mathit{i}\mathit{o}\mathit{n}\mathbf{ }\mathbf{cos}\mathit{t}\mathbf{)} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{38}\mathbf{,}\mathbf{000}\mathbf{\times }\mathbf{(}\mathbf{\$}\mathbf{0}\mathbf{.}\mathbf{75}\mathbf{+}\mathbf{\$}\mathbf{0}\mathbf{.}\mathbf{55}\mathbf{)} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{\$}\mathbf{49}\mathbf{,}\mathbf{400} \end{gathered}$$

Step 2: Cost of 24,000 units, 20% completed units

$$\begin{gathered} \mathit{C}\mathit{o}\mathit{s}\mathit{t}\mathbf{ }\mathit{o}\mathit{f}\mathbf{ }\mathit{W}\mathit{I}\mathit{P}\mathbf{ }\mathit{u}\mathit{n}\mathit{i}\mathit{t}\mathit{s}\mathbf{ }\mathbf{=}\mathbf{Equalent}\mathbf{ }\mathbf{unit}\mathbf{ }\mathbf{of}\mathbf{ }\mathbf{production}\mathbf{\times }\mathbf{(}\mathbf{cost}\mathbf{ }\mathbf{of}\mathbf{ }\mathbf{direct}\mathbf{ }\mathbf{material}\mathbf{+}\mathit{C}\mathit{o}\mathit{n}\mathit{v}\mathit{e}\mathit{r}\mathit{s}\mathit{i}\mathit{o}\mathit{n}\mathbf{ }\mathbf{cos}\mathit{t}\mathbf{)} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{24}\mathbf{,}\mathbf{000}\mathbf{\times }\mathbf{(}\mathbf{\$}\mathbf{0}\mathbf{.}\mathbf{75}\mathbf{+}\mathbf{\$}\mathbf{0}\mathbf{.}\mathbf{55}\mathbf{)} \\ \mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{ }\mathbf{=}\mathbf{\$}\mathbf{31}\mathbf{,}\mathbf{200} \end{gathered}$$