Question

Bonita Company's Assembly Department has materials cost at $4 per unit and conversion cost at $8 per unit. There are 30900 units in ending work in process, all of which are 70% complete as to conversion costs. All materials are added at the beginning of the process. How much are total costs to be assigned to ending inventory

Answer 1

Answer:

$296,640

Explanation:

The ending inventory cost is valued using the material cost and the conversion cost.

Where the conversion is yet to be completed, the value of the work in progress is added to that of the raw materials to get the ending inventory value.

Hence,

ending inventory balance = ($4 × 30900) + ($8 × 30900 × 0.7)

= $296,640

Answer 2

Answer: $296,640

Explanation:

Total Cost assigned to inventory

Calculation

The Materials cost $4 per unit   * 30,900 units = $123,600

Conversion cost = $8 * per unit * 30,900 units =$247,200

Completion Rate

$247,200* 70 /100=$173,040

Total Costs

= $123,600 + $173,040 =$296,640