In June 2019, Department 2 of Lulu Manufacturing Company received 80,000 units from Department 1. At the
Question:
In June 2019, Department 2 of Lulu Manufacturing Company received 80,000 units from Department 1. At the end of the month, it completed 84,000 units, including 16,000 units in the beginning that are 60% converted and reported 8,000 units still in process at the end, 50% converted. Because of the sensitive nature of the process, the company provides 2.5% of the total units put into production as an allowance for breakage.
Materials are added at the start of the process in Department 1 while packaging materials are added at the end of the process in Department 2. Inspection is done at the end of the process.
The following unit cost per EUP is available:
Costs last month Costs this month
Prior department 9.75 11.70
Direct materials 1.80 2.20
Conversion costs 4.50 5.40
What is the total cost of completed units in Department 2?