The inventory at November 1 and costs charged to Work in Process - Department 60

Question

The inventory at November 1 and costs charged to Work in Process - Department 60 during November are as follows: 3,800 units, 3/5 completed -- $60,400 Direct materials-- $378,000 Direct labor-- $274,000 Factory overhead -- $168,000 Total cost to be accounted for-- $880,400 During November, 32,000 units were placed into production and 31,200 units were completed, including those in inventory on November 1. On November 30, the inventory of work in process consisted of 4,600 units which were 4.25/5 completed. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process. Determine the following, presenting your computations (Prepare your computations using unit cost data to four decimal places, i.e. $4.4444, to minimize rounding differences): Assuming that the conversion cost per unit is the same for October and November, by how much the direct material cost per unit increase and/or decrease from October to November? A) 13.4633 Increase B) 11.8125 Decrease C) 3.9957 Increase D) 7.8168 Decrease

Explanation / Answer

B) 11.8125 Decrease

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