Kimbeth Manufacturing uses process costing to control costs in the manufacture o
ID: 2483781 • Letter: K
Question
Kimbeth Manufacturing uses process costing to control costs in the manufacture of Dust Sensors for the mining industry. The following information pertains to operations for November.
55,200
The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The ending inventory was 90% complete as to materials and 40% complete as to conversion costs.
Costs pertaining to November are as follows:
Beginning inventory: direct materials, $185,680; direct labor, $69,430; manufacturing overhead, $52,480.
Costs incurred during the month: direct materials, $1,614,600; direct labor, $629,700; manufacturing overhead, $1,340,120.
What are the total costs in the ending Work-in-Process Inventory assuming Kimbeth uses first-in, first-out (FIFO) process costing? (Do not round your intermediate calculations. Round your final answer to the nearest whole number.)
The answer choices are:
$351,440.
$527,518.
$564,778.
$463,458.
Units Work-in-process, November 1st 36,800 Started in production during November 230,000 Work-in-process, November 30th55,200
Explanation / Answer
EQUIVELENT UNIT COST OF MATERIAL
= $1614600 / (36800 * 0.4) + 174800 + (55200 * 0.90)
= $1614600 / 239200
= $6.75
EQUIVELENT UNIT COST OF CONVERSION
= ($629700 + $1340120) / (36800 * 0.8) + 174800 + (55200 * 0.4)
= $1969820 / 226320
= $8.70
TOTAL COST OF ENDING INVENTORY
= (55200 * 0.9) * $6.75 + (55200 * 0.4) * $8.70
= $527436
THE ANSWER IN YOUR OPTION WILL BE $527518, THERE IS LITTLE DIFFRENCE BECAUSE OF ROUNDING OF DECIMAL.
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