A company that uses process costing has 1,000 units in ending Work in Process Inventory that
Are 100% complete with respect to materials and 80% complete with respect to conversion costs.The cost per unit for inventory is $2.15 for materials and $1.65 for conversion costs.What is the cost assigned to the ending Work in Process inventory?
A)$3,470
B)$3,800
C)$3,040
D)$2,150

Question

Quizplus · Accepted Answer

The cost assigned to the ending Work in Process inventory is calculated by adding the full material costs (100% complete) and the partial conversion costs (80% complete) for the 1,000 units. The material cost per unit is $2.15, so for 1,000 units, it's $2,150. The conversion cost per unit is $1.65, but since they are only 80% complete, the cost is $1.65 * 80% = $1.32 per unit, making it $1,320 for 1,000 units. Adding both gives $2,150 (materials) + $1,320 (conversion) = $3,470.

A Company That Uses Process Costing Has 1,000 Units in Ending