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11 May, 13:02

The following is an account for a production department, showing its costs for one month:

Goods in Process Inventory

Balance 6,300

Direct materials 22,500

Direct labor 17,100

Overhead 11,700

Assume that materials are added at the beginning of the production process and that direct labor and overhead are applied uniformly. If the units in ending goods in process inventory cost $5,490, and the started and completed units cost $42,750, what was the cost of completing the units in the beginning goods in process inventory?

a) $14,850.

b) $9,360.

c) $3,060.

d) $57,600.

e) $37,260.

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Answers (1)
  1. 11 May, 16:59
    0
    option (b) $9,360

    Step-by-step explanation:

    Given:

    Goods in Process Inventory

    Balance = $6,300

    Direct materials = $22,500

    Direct labor = $17,100

    Overhead = $11,700

    The cost of units in ending goods in process inventory = $5,490

    The cost of started and completed units = $42,750

    Now,

    The cost of total Goods in Process Inventory will be

    = Balance + Direct materials + Direct labor + Overhead

    = $6,300 + $22,500 + $17,100 + $11,700

    = $57,600

    also,

    Cost of units to be transferred out

    = cost of total Goods in Process Inventory - (cost of units in ending goods in process inventory)

    = $57,600 - $5,490

    = $52,110

    Thus,

    Cost of Completed Goods in Beginning Inventory

    = Cost of units to be transferred out - cost of started and completed units

    = $52,110 - $42,750

    = $9,360

    Hence, the answer is option (b) $9,360
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