Williams Company computed its cost per equivalent unit for direct materials to be $2.60 and its cost per equivalent unit for conversion to be $3.75.A total of 250,000 units of product were completed and transferred out as finished goods during the month,and 36,000 of equivalent units remained unfinished at the end of the month.The amount that should be reported in Finished Goods Inventory is:
A)$650,000.
B)$135,000.
C)$1,816,100.
D)$1,587,500.
E)$228,600.

Question

Quizplus · Accepted Answer

Calculation for cost of finished goods inventory:
Cost of completed and transferred out units = 250,000 units x ($2.60 + $3.75) = $1,587,500
Cost of unfinished units = 36,000 units x ($2.60 + $3.75) = $228,600
Total cost in finished goods inventory = $1,587,500 (completed) + $228,600 (unfinished) = $1,816,100
Therefore, the answer is D.

Williams Company Computed Its Cost Per Equivalent Unit for Direct