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Dear Sir, I am confused which the opening and the closing WIP and of giving costs to the units in this question:
A company which operates a process costing system had work-in-progress at the start of last month of 300 units (valued at 1710) which were 60% complete in respect of all costs. Last month a total of 2000 units were completed and transferred to the finished goods warehouse. The cost per equivalent unit for costs arising last month was $10. The company uses the FIFO method of cost allocation. What was the total value of the 2000 units transferred to the finished goods warehouse last month?
(A) 19910
(B) 20000
(C) 20510
(D) 21710Of the 2,000 units completed, 300 of them were already in progress and therefore the remaining 1700 we completed in full during the period.
The 1700 will all be value at $10, so a total of $17,000
The 300 will be valued at the 1710, plus the cost of finishing them which is 300 x 40% x $10 = $1,200. So a total for these 300 of $2,910
So the total value of the 2,000 = 2,910 + 17,000 = $19,920.
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