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A manufacturing process had no opening work-in-progress and no losses during this period. At the end of the period it had completed 2,200 units and had 340 units unfinished.
The costs per equivalent unit for the period were:
Materials $7.50
Conversion costs $5.80
The unfinished units were 80% complete with respect to materials and 50% complete with respect to conversion costs.What is the value of the completed output?
My answer:
2,200 X ($5.80 + $7.50) = $29,260
340 X 80% = 272
272 X 7.5 = 2,040 Completed material340 X 50% = 170
170 X 5.8 = 986 Completed conversion29,260 + 986 +2040 = 32,286
But the answer is $29,260. And I don’t get it why.
thanks in advance
The question asks for the value of the completed output.
2,200 units were completed. There was no opening WIP and the cost per unit for the period is 5.80 + 7.50.
Therefore the cost of the completed units is 29,260 as per the first line of your answer.
I have no idea why you have then looked at the closing WIP. They have not been completed and their value is not asked for in the question.
ohh I just confused sometimes some test asks, for example: what are the equivalent units of production in the period? or something like that… and that’s why I calculated closing WIP.
thank you Sir. now I see
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