On August 1, Jones Corporation's Packaging Department Had Work in Process

question 124

Essay

On August 1, Jones Corporation's packaging department had Work in Process inventory of 8,000 units that were 75% complete with respect to materials and 30% complete with respect to conversion costs. The cost of these units was $99,525 ($62,000 transferred-in from previous departments, $28,775 in materials, and $8,750 in labor and overhead). During August, 125,000 units were transferred into the department. These units had accumulated costs in previous departments of $1,418,560. The packaging department incurred costs of $799,225 for materials and $498,010 for conversion costs in August and transferred 131,000 units out of the department. The 2,000 units remaining in ending inventory are 50% complete with respect to materials and 20% complete with respect to conversion costs. Jones Corporation uses the average cost method to cost its inventories.
Required
a. Calculate the cost per equivalent unit for transferred-in costs, materials, and conversion costs.
b. Calculate the cost of the units transferred out of the department.
c. Calculate the cost of the ending inventory.

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Definitions:

Working Conditions

The environment in which an individual works, including aspects such as safety, hours, physical conditions, and stress levels.

Gestalt

A psychological approach that looks at the human mind and behavior as a whole, emphasizing that the whole is different from and greater than the sum of its parts.

Perception

The process by which an organism interprets and organizes sensory information to produce a meaningful experience of the world.

Primitive Sexual Urges

Basic, innate sexual desires and instincts present in humans, often considered a fundamental aspect of Freudian theory.