The Inventory at June 1 and Costs Charged to Work

question 184

Essay

The inventory at June 1 and costs charged to Work in Process-Department 60 during June are as follows:
3,800 units, 80% completed $25,000 materials, $35,400 conversion $ 60,400 Direct materials, 32,000 units 368,000
Direct labor 244,000
Factory overhead 188,000
Total cost to be accounted for $860,400
During June, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on June 1.On June 30, the inventory of work in process consisted of 4,600 units which were 40% completed.Inventories are costed by the average cost method and all materials are added at the beginning of the process.
Determine the following, presenting your computations:
a Equivalent units of production for conversion cost
b Conversion cost per equivalent unit and material cost per equivalent unit.
c Total and unit cost of finished goods completed in the current period
d Total cost of work in process inventory at June 30

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Definitions:

Substitution Effect

An alteration in consumer choice between two goods when the price of one good changes relative to the price of another, influencing the allocation of their budget.

Income Effect

The relationship between changing income in a person's life or the economy and the subsequent demand for certain goods or services.

Perfect Substitutes

Goods for which consumers are willing to replace one for the other at a constant rate, without affecting their level of utility.

Substitution Effect

The change in consumption patterns due to a change in relative prices, leading consumers to substitute one product for another.