In the Shaping Department of Jenkins Company the unit materials cost is $2.50 and the unit conversion cost is $1.50. The department transferred out 8,000 units and had 1,000 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) 800.
B) 2,500.
C) 2,800.
D) 4,000.

Question

Quizplus · Accepted Answer

The cost to be assigned to the ending work in process has two components: materials cost and conversion cost.

For materials cost, we need to calculate the cost of materials in the 1,000 units of ending work in process. Since all materials are added at the beginning of the process, we can assume that the 1,000 units in ending work in process are 20% complete, meaning that they have used up 80% of their materials. Therefore, the materials cost in the ending work in process is:
$2.50 (unit materials cost) × 1,000 (ending work in process units) × 80% = $2,000.

For conversion cost, we need to calculate the cost of converting the 1,000 units of ending work in process to completion. Since the 1,000 units are 20% complete, they still require 80% more conversion cost. Therefore, the conversion cost in the ending work in process is:
$1.50 (unit conversion cost) × 1,000 (ending work in process units) × 80% = $1,200.

Therefore, the total cost to be assigned to the ending work in process is:
$2,000 (materials cost) + $1,200 (conversion cost) = $2,800.

The best choice is C.

In the Shaping Department of Jenkins Company the Unit Materials