In the Shaping Department of Jenkins Company the unit materials cost is $3.00 and the unit conversion cost is $1.80. The department transferred out 8000 units and had 2000 units in ending work in process 20% complete. If all materials are added at the beginning of the process the total cost to be assigned to the ending work in process is
A) $1920.
B) $6000.
C) $6720.
D) $9600.

Question

Quizplus · Accepted Answer

The total cost of units completed and transferred out is calculated as follows:

Total cost = (unit materials cost + unit conversion cost) x number of completed units 
Total cost = ($3.00 + $1.80) x 8000 
Total cost = $23,040

To calculate the cost of ending work in process, we need to use the weighted-average method.

Step 1: Calculate the equivalent units of production

Equivalent units of production = number of units in ending work in process x percentage of completion 
Equivalent units of production = 2000 x 20% 
Equivalent units of production = 400

Step 2: Calculate the total cost of ending work in process

Total cost of ending work in process = (unit materials cost + unit conversion cost) x equivalent units of production 
Total cost of ending work in process = ($3.00 + $1.80) x 400 
Total cost of ending work in process = $1920

Therefore, the best choice is C.

In the Shaping Department of Jenkins Company the Unit Materials