Beginning work in process inventory 17,000 40%. Transferred in from the prior department 72,000. Ending work in process inventory 18,000 30% According to the company records the conversion cost in the beginning work in process inventory was $63.104 at the beginning of September .additional conversion costs of 654,240 were incurred in the department during the month. All I need formula for this problem. Thank you....
To calculate the conversion costs for the given scenario, you can use the following formula:
Conversion Costs = (Beginning Work in Process Inventory x Percentage) + Transferred In + Additional Conversion Costs - (Ending Work in Process Inventory x Percentage)
Given values:
Beginning Work in Process Inventory = $63,104
Percentage for Beginning Work in Process Inventory = 40%
Transferred In = $72,000
Ending Work in Process Inventory = $18,000
Percentage for Ending Work in Process Inventory = 30%
Additional Conversion Costs = $654,240
Plugging in the values into the formula, we get:
Conversion Costs = ($63,104 x 40%) + $72,000 + $654,240 - ($18,000 x 30%)
Now, let's calculate each part separately:
($63,104 x 40%) = $25,241.6
($18,000 x 30%) = $5,400
Putting the values back into the formula:
Conversion Costs = $25,241.6 + $72,000 + $654,240 - $5,400
Finally, adding up these values:
Conversion Costs = $25,241.6 + $72,000 + $654,240 - $5,400
Conversion Costs = $746,081.6
Therefore, the conversion costs for the given scenario is $746,081.6.