Reference no: EM132951058

Company A uses process costing in its manufacturing operations. There are three processing departments: Department 1, Department 2, and Department 3. On January 1, 2012, Department 1 had a zero beginning balance in its work-in-process account. During January, 40,000 units of product were started in Department 1 and 32,000 units of product were transferred to Department 2. In Department 1, all raw materials are added at the beginning of the production process and conversion costs are incurred evenly through the process.

For the month of January, the costs per equivalent unit in Department 1 were calculated as follows: $1.20 for direct materials and $5.75 for conversion costs.

Problem 1: The ending inventory in Department 1 was 60% complete with respect to conversion costs. Using this data, what is the cost assigned to units Department 1's ending inventory?