Bentley Enterprises uses process costing to control costs in the manufacture of

Question

Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the mining industry. The following information pertains to operations for November OA Earn adapted Work in process, November t Started in production during November Work in process, November 30 6,700 107000 24700 was 60% complete as to materials and 20% complete es to conversion costs The ending inventory was 90% complete as to materials and 40% The begnnng inventory complete as to conversion costs Costs penteining to November are as follows Beginning inventory direct materials, $55,260, direct labor, $21020, manufacturing overhead, $15,940 Costs incurred during the month drect materials, $475,000, direct labor $189,880, manufacturing overhead, $398160 What is the equivalent unit cost for the conversion costs assuming Bentley uses first-in, first-out (FIFO) process costing? O $5.57 O $5 82 O 5562 O $5.25

Explanation / Answer

Calculation of equivalent units for the conversion costs

Total Conversion Costs incurred = Direct Labor+Manufacturing overhead = 189880+398160 = 588040

Equivalent Unit Cost =Direct Material Cost / Equivalent Units of Production

= 588040/104740 = 5.62

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Units Percentage of completion during the year Processed Units Beginning WIP 16700 90% 15030 Units Started and completed 107000 107000-24700 82300 Ending WIP 24700 30% 7410 104740

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