Question

Department S had no work in process at the beginning of the period. It added 12,800 units of direct materials during the period at a cost of $89,600; 9,600 units were completed during the period; and 3,200 units were 22% completed as to labor and overhead at the end of the period. All materials are added at the beginning of the process. Direct labor was $52,300 and factory overhead was $9,500. What were the total cost of units completed during the period?(A) $157,698 (B) $126,872 (C) $30,826 (D) $97,538

Answer 1

Answer:

(B) $126,872

Explanation:

Provided total cost of materials = $89,600

The above is cost of 12,800 units, cost for 9,600 units = ($89,600/12,800) $\times$ 9,600 = $67,200

Further cost of direct labor for the period = $52,300

Which is total cost for 9,600 completed and 3,200 closing stock which is 22% complete.

Equivalent complete units = 3,200 $\times$ 22% = 704 units

Total equivalent complete units = 9,600 + 704 = 10,304

Cost per unit = $52,300/10,304 = $5.08

Factory overhead cost = $9,500

Cost per unit = $9,500/10,304 = $0.922

Thus total cost of units completed during the month

= $67,200 + $5.08 $\times$ 9,600 + $0.922 $\times$ 9,600

= $67,200 + $48,768 + $8,851

= $124,819

Since the closest is B) 126,872 this will be chosen.