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Indigo Company has the following production data for June: units completed and transferred out, 60,000 and ending work in process inventory, 7,200 units that are 100% complete for materials and 30% complete for conversion costs. Unit materials cost is $5 and unit conversion cost is $7. Determine the costs to be assigned to the units completed and transferred out and the units in ending work in process inventory. Cost assigned to units completed and transferred out $enter a dollar amount Cost assigned to the units in ending work in process inventory $enter a dollar amount

Sagot :

Anthougoidn

1. The cost assigned to units completed and transferred out based on equivalent units for Indigo Company is $720,000.

2. The cost assigned to the units in ending work in process inventory based on equivalent units for Indigo Company is $51,120.

What are equivalent units?

Equivalent units show the weighted average value of work done on uncompleted processes or jobs.

Equivalent units are computed by multiplying the degree or percentage of completion by the physical units.

Data and Calculations:

                                              Materials                    Conversion Costs

Unit costs                                  $5                                      $7

Units transferred out             60,000                            60,000

Degree of completion               100%                              100%

Cost of units transferred out  $300,000 ($5x60,000) $420,000 ($7x60,000) = $720,000

Ending inventory                 7,200 (100%)                    2,160 (30%)

Cost of ending inventory   $36,000 ($5x7,200)        $15,120 ($7x2,160) = $51,120

Thus, the cost of units transferred out is $720,000 and the cost of ending inventory is $51,120.

Learn more about equivalent units at https://brainly.com/question/16259709

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