DM are added at the beginning of the process Physical units

DM are added at the beginning of the process.

Physical units are as follows:
Beginning WIP = 40,000 units, 80% completed last period.
Of the 76,000 units started this period, only 42,000 were complete at the end of the period.
Ending WIP was 60% complete as to CC.

Costs are as follows:
Beginning WIP: DM $41,080; CC $95,928
Current month costs: DM $90,000; CC $157,000

What is the DM cost for ending WIP?

$295,200

$38,420

$92,660

$88,808

Solution

Equivalent unit of material = (40000+42000)+34000 = 116000

Equivalent unit of conversion = (40000+42000)+34000*60% = 102400

Cost per equivalent unit of material = (41080+90000)/116000 = 1.13

Cost per equivalent unit of conversion = (95928+157000)/102400 = 2.47

Direct material cost for ending work in process = 34000*100%*1.13 = 38420

So answer is b) $38420