Assume that Delaware Ice Cream Company uses the FIFO method to calculate equivalent units. It has unit costs of $10 for materials and a conversion cost of $30. There are 2,500 units in ending goods in process, 100 percent complete with respect to materials and 40 percent complete with respect to conversion. What is the total cost assignable to its ending work in process inventory?

 Assume that Delaware Ice Cream Company uses the FIFO method to calculate equivalent units. It has unit costs of $10 for materials and a conversion cost of $30. There are 2,500 units in ending goods in process, 100 percent complete with respect to materials and 40 percent complete with respect to conversion. What is the total cost assignable to its ending work in process inventory?

multiple choice

    $45,000
    $75,000
    $55,000 Correct
    $100,000

Explanation

Knowledge Check 01

Cost assignable to ending Work in process inventory = Materials cost of $25,000 (or 2,500 units × 100% × $10 per EUP) + Conversion cost of $30,000 (or 2,500 units × 40% × $30 per EUP) = $55,000.