Answer (D) is correct . The equivalent units for raw materials would be 10,000 (8,000 + 2,000) since the work-in-process is 100% complete as to materials. Therefore, dividing the $33,000 by 10,000 units results in a unit cost for materials of $3.30. The equivalent units for conversion costs would be 8,500 units [8,000?+ (2,000 units × .25)]. Dividing the $17,000 of conversion costs by 8,500 equivalent units results in a unit cost of $2 per bat. Therefore, the total cost of goods transferred out would be $5.30, consisting of $3.30 for materials and $2 for conversion costs. Multiplying $5.30 times the 8,000 bats completed results in a total transfer of $42,400. Consequently, the cost of the ending work-in-process must have been $7,600 ($50,000 total costs incurred – $42,400).
Answer (A) is incorrect because The amount of $10,000 assumes that work-in-process inventory is 100% complete as to conversion costs.
Answer (B) is incorrect because The amount of $2,500 assumes that work-in-process inventory is 100% complete as to conversion costs and that 500 bats are in inventory.
Answer (C) is incorrect because The amount of $20,000 assumes that work-in-process is 100% complete as to conversion costs and that 6,000 units were transferred out.
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The cost of the work-in-process inventory in Snapping Turtle’s Forming Department at the end of May is
