Department S had no work in process at the beginning of the period , 18,000 units were started during the period, 2,000 units were 30% completed at the end of the period, and the following manufacturing costs were debited to the departmental work in process account during the period (FIFO)
Direct Materials 80100
Direct Labor $ 102,300
Factory Overhead $ 37,200
Assuming that all direct materials are placed in process at the beginning of production, What is the total cost of units completed during the period?
a. $80.000
b. $205,600
c. $139,500
d. $219,500
it's A
To calculate the total cost of units completed during the period, we need to consider the units started and the percentage of completion.
First, let's determine the units completed during the period:
Units started = 18,000 units
Units 30% completed at the end = 2,000 units
Units completed = Units started - Units 30% completed at the end
Units completed = 18,000 - 2,000
Units completed = 16,000 units
Next, let's calculate the cost of units completed using the FIFO method.
According to the FIFO method, we assume that all direct materials are placed in process at the beginning of production.
Total manufacturing cost = Direct Materials + Direct Labor + Factory Overhead
Total manufacturing cost = $80,100 + $102,300 + $37,200
Total manufacturing cost = $219,600
Cost per unit = Total manufacturing cost / Units started
Cost per unit = $219,600 / 18,000 units
Cost per unit = $12.20
Total cost of units completed = Cost per unit x Units completed
Total cost of units completed = $12.20 x 16,000 units
Total cost of units completed = $195,200
Therefore, the correct answer is:
b. $205,600