question 38\n2 pts\nmaterials cost of $1,200,000 and conversion cost of $1,530,000 were charged to a…

question 38\n2 pts\nmaterials cost of $1,200,000 and conversion cost of $1,530,000 were charged to a processing department in the month of september. materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. there were no units in beginning work in process inventory, 20,000 units were started into production in september, and there were 5,000 units in ending work in process inventory that were 40% complete as to conversion costs at the end of september.\nwhat was the total manufacturing cost assigned to those units that were completed and transferred out during september?\n$2,409,750\n$3,000,000\n$2,047,500\n$2,250,000

question 38\n2 pts\nmaterials cost of $1,200,000 and conversion cost of $1,530,000 were charged to a processing department in the month of september. materials are added at the beginning of the process while conversion costs are incurred uniformly throughout the process. there were no units in beginning work in process inventory, 20,000 units were started into production in september, and there were 5,000 units in ending work in process inventory that were 40% complete as to conversion costs at the end of september.\nwhat was the total manufacturing cost assigned to those units that were completed and transferred out during september?\n$2,409,750\n$3,000,000\n$2,047,500\n$2,250,000

Answer

Explanation:

Step1: Calculate equivalent units of production for materials

Materials are added at the start, so equivalent - units for materials = units started = 20,000.

Step2: Calculate equivalent units of production for conversion costs

Equivalent units for conversion costs = units completed + (ending work - in - process units × % complete). Units completed = 20,000 - 5,000=15,000. Ending work - in - process units = 5,000 and % complete = 40%. So equivalent units for conversion costs = 15,000+(5,000×0.4)=15,000 + 2,000=17,000.

Step3: Calculate cost per equivalent unit for materials

Cost per equivalent unit for materials = $\frac{Materials\ cost}{Equivalent\ units\ for\ materials}=\frac{1200000}{20000}=60$.

Step4: Calculate cost per equivalent unit for conversion costs

Cost per equivalent unit for conversion costs = $\frac{Conversion\ cost}{Equivalent\ units\ for\ conversion\ costs}=\frac{1530000}{17000}=90$.

Step5: Calculate total cost per unit

Total cost per unit = cost per equivalent unit for materials+cost per equivalent unit for conversion costs = 60 + 90=150.

Step6: Calculate cost of units completed and transferred out

Units completed and transferred out = 15,000. Total manufacturing cost assigned to units completed and transferred out = 15,000×150 = 2,250,000.

Answer:

$2,250,000