Williams Company computed its cost per equivalent unit for direct materials to be $1.50 and its cost per equivalent unit for conversion to be $3.77. A total of 308,000 units of product were completed and transferred out as finished goods during the month, and 23,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:

Question

Business

Zara Watson

9 August, 12:47

Williams Company computed its cost per equivalent unit for direct materials to be $1.50 and its cost per equivalent unit for conversion to be $3.77. A total of 308,000 units of product were completed and transferred out as finished goods during the month, and 23,000 of equivalent units remained unfinished at the end of the month. The amount that should be reported in Finished Goods Inventory is:

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Madalynn · Answer 1

Williams Company computed its cost per equivalent unit for direct materials to be $1.50 and its cost per equivalent unit for conversion to be $3.77. A total of 308,000 units of product were completed and transferred out as finished goods during the month, and 23,000 of equivalent units remained unfinished at the end of the month.

The amount that should be reported in Finished Goods Inventory is $121210

Explanation:

Equivalent units refers to the units in production multiplied by the percentage of the completed units or the units that are in process

The formula for calculating Equivalent units is multiplying the physical units with the percentage of the units that are completed.

In the question above it is given that

The ending inventory was 23,000 equivalent units, both in direct materials and conversion costs.

Direct Material = 23000 * $1.50=$34500

Conversion = 23000*$3.77=$86710

Total ending work in Progress=$34500+$86710=$121210