Tracker Sports Is a Manufacturer of Sportswear Beginning WIP Was Half Complete as to Conversion Costs

Tracker Sports is a manufacturer of sportswear. Tracker produces its products in two departments.
The information for the current month for Department #2 is as follows:
$\begin{array}{ll}\text { Beginning work-in-process } & 20,000 \text {unit } \\ \text { Units transferred in from Department \#1 } & 40,000 \text { units } \\ \text { Units completed } & 50,000\text { units } \\ \text { Ending work-in-process } & 10,000 \text { units } \\\text { Beginning WIP transferred in costs } & \$ 50,000 \\ \text { Beginning WIP direct materials } & \$ 12,000 \\ \text { Beginning WIP direct labor } & \$ 3,200 \\\text { Beginning WIP overhead } & \$ 1,600 \\ \text { Coststransferred in from Department \#1 } & \$ 100,000\\ \text { Direct material added during month } & \$ 60,000 \\\text { Direct labor during month } & \$ 20,000 \\\text { Manufacturing overhead applied } & \text { ??? } \\\end{array}$
Beginning WIP was half complete as to conversion costs. Direct materials for Department #2 are added when the process is 25% complete. Manufacturing overhead is applied at a rate equal to 50 percent of direct labor. Ending WIP was 60 percent complete. Tracker Sports uses first-in, first-out (FIFO) costing.
Required:
(HINT: use 4 decimal places in your calculations)
a. Compute the equivalent units of production for each input.
b. Compute the cost per equivalent unit.
c. Compute the cost transferred out to finished goods.
d. Compute the ending work-in-process inventory balance.

Correct Answer:

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Overhead applied = 50% × $20,000 = $10,0...

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