Colil Computer Systems, Inc., manufactures printer circuit cards. All direct materials are added at the inception of the production process. During January, the accounting department noted that there was no beginning inventory. Direct materials of $315,000 were used during the month. Work-in-process records revealed that 9,000 card units were started in January, 8,100 card units were complete, and 7,400 card units were spoiled as expected. Ending work-in-process card units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete. Required:
What is the amount allocated to the work-in-process ending inventory?

“The amount allocated to the work-in-process ending inventory is $30,000

Explanation:

For computing the allocated amount for ending work in progress, first, we have to compute the per unit cost which is shown below:

Per unit cost = (Total cost) ÷ (total number of units)

where,

Total cost is $300,000

And, the total number of units equal to

= Units started + spoiled units + ending work in progress units

= 5,000 units + 4,000 units + 1,000 units

= 10,000 units

The closing units is

= Total units - Units started - spoiled units

= 10,000 - 5,000 - 4,000

= 1,000 units

Now put these values to the above formula  

So, the per unit would equal to

= $300,000 ÷ 10,000 units

= $30

So, the ending work in progress is

= Ending work in progress units × per unit

= 1,000 units × 30

= $30,000”