Department A had 4,000 units in Work in Process that were 69% completed at the beginning of the period at a cost of $8,000. During the period, 33,400 units of direct materials were added at a cost of $76,820, and 34,400 units were completed. At the end of the period, 3,000 units were 28% completed. All materials are added at the beginning of the process. Direct labor was $25,800 and factory overhead was $5,000. The cost of the 3,000 units in process at the end of the period if the first-in, first-out method is used to cost inventories was a. $7,299 b. $7,697 c. $8,494 d. $6,900

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**Work in Process and Cost Inventory Analysis**

Department A had 4,000 units in Work in Process that were 69% completed at the beginning of the period at a cost of $8,000. During the period, 33,400 units of direct materials were added at a cost of $76,820, and 34,400 units were completed. At the end of the period, 3,000 units were 28% completed. All materials are added at the beginning of the process. Direct labor was $25,800 and factory overhead was $5,000. The cost of the 3,000 units in process at the end of the period if the first-in, first-out method is used to cost inventories was:

- a. $7,299
- b. $7,697
- c. $8,494
- d. $6,900

### Explanation:

1. **Beginning Work in Process (WIP):**
    - Units: 4,000
    - Percentage completion: 69%
    - Cost: $8,000

2. **During the Period:**
    - Direct materials added: 33,400 units at $76,820
    - Direct labor: $25,800
    - Factory overhead: $5,000
    - Units completed: 34,400

3. **End of the Period WIP:**
    - Units: 3,000
    - Percentage completion: 28%

### Calculation Using the First-In, First-Out (FIFO) Method:

1. **Units to Account for:**
    - Beginning WIP: 4,000
    - Added during the period: 33,400
    - Total units to account for: 37,400

2. **Units Accounted for:**
    - Completed and transferred out: 34,400
    - Closing WIP: 3,000
    - Total units accounted for: 37,400

3. **Equivalent Units (using FIFO):**
    - For materials (Assuming materials are added at the beginning):
        - Completed: 34,400 units
        - Closing Work in Process: 3,000 units * 100% = 3,000 units
        - Total equivalent units for materials: 37,400 units

    - For conversion costs:
        - Completed: (4,000 * (1 -
Transcribed Image Text:**Work in Process and Cost Inventory Analysis** Department A had 4,000 units in Work in Process that were 69% completed at the beginning of the period at a cost of $8,000. During the period, 33,400 units of direct materials were added at a cost of $76,820, and 34,400 units were completed. At the end of the period, 3,000 units were 28% completed. All materials are added at the beginning of the process. Direct labor was $25,800 and factory overhead was $5,000. The cost of the 3,000 units in process at the end of the period if the first-in, first-out method is used to cost inventories was: - a. $7,299 - b. $7,697 - c. $8,494 - d. $6,900 ### Explanation: 1. **Beginning Work in Process (WIP):** - Units: 4,000 - Percentage completion: 69% - Cost: $8,000 2. **During the Period:** - Direct materials added: 33,400 units at $76,820 - Direct labor: $25,800 - Factory overhead: $5,000 - Units completed: 34,400 3. **End of the Period WIP:** - Units: 3,000 - Percentage completion: 28% ### Calculation Using the First-In, First-Out (FIFO) Method: 1. **Units to Account for:** - Beginning WIP: 4,000 - Added during the period: 33,400 - Total units to account for: 37,400 2. **Units Accounted for:** - Completed and transferred out: 34,400 - Closing WIP: 3,000 - Total units accounted for: 37,400 3. **Equivalent Units (using FIFO):** - For materials (Assuming materials are added at the beginning): - Completed: 34,400 units - Closing Work in Process: 3,000 units * 100% = 3,000 units - Total equivalent units for materials: 37,400 units - For conversion costs: - Completed: (4,000 * (1 -
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