Asked by Luqman Waheeduddin on May 17, 2024
Verified
Kramer Company started its production operations on August 1. During August, the Printing Department completed 17,600 units. There were 4,400 units in ending inventory that were 80% complete with respect to materials and 10% complete with respect to conversion costs. During August, the department had accumulated materials costs of $45,408 and conversion costs of $76,670.?Required:
(a) Calculate the cost of the goods transferred out.
(b) What is the value of the ending inventory?
Conversion Costs
The combination of labor costs and overhead expenses associated with the conversion of raw materials into finished products.
Materials Costs
The cost of raw materials and supplies used in the production of goods or in the provision of services.
Goods Transferred
Goods transferred refers to the movement of inventory from one location to another, or the process of turning over goods from a seller to a buyer.
- Work out equivalent units for conversion and materials by adopting FIFO and average cost methods.
Verified Answer
(80% × 4,400)] = $2.15Cost per Equivalent Unit for Conversion Costs = $76,670/[17,600 +
(10% × 4,400)] = $4.25?
(a) ($2.15 + $4.25) × 17,600 = $112,640?
(b) ($2.15 × 80% × 4,400) + ($4.25 × 10% × 4,400) = $9,438
Learning Objectives
- Work out equivalent units for conversion and materials by adopting FIFO and average cost methods.
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