TEST BANK managerial accounting 13e by garrison chapter 04

Which of the following are needed to compute equivalent units for conversion costs under the weighted-average method of process costing?Percentage completion ofbeginning work in process

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Ans: False AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 2 Level: Hard

4 In order to equitably allocate costs in a process costing system, dissimilar products are restated in terms of equivalent units by weighting the number of units produced by their market values

Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy

5 In a process costing system, units transferred to the next processing department are presumed to be 100% complete with respect to the work performed by the transferringdepartment

Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 2 Level: Easy

6 Under a weighted-average process costing system when all materials are added at the beginning of the production process, the equivalent units for materials is equal to the units completed and transferred out

Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition 4-7

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8 The equivalent units of production for a department using the FIFO process costing method is equal to the number of units completed plus the equivalent units in the ending inventory

AICPA FN: Reporting Appendix: 4A LO: 5 Level: Hard

9 The step-down method of cost allocation is more accurate than the direct method sincethe step-down method considers services that service departments provide to each other

Ans: True AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4B LO: 8,9 Level: Easy

10 The step-down method and the direct method of cost allocation will result in the same amount of service department cost being allocated to a given operating department, although the step-down method is easier to apply than the direct method

Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting Appendix: 4B LO: 8,9 Level: Medium

11 The order in which the costs of service departments are allocated will affect the amounts allocated to an operating department when the direct method is used

AICPA FN: Reporting Appendix: 4B LO: 8 Level: Medium

12 The units in beginning work in process inventory plus the units started into productionmust equal the units transferred out of the department plus the units in ending work in process inventory

4-8 Garrison/Noreen/Brewer, Managerial Accounting, Twelfth Edition

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13 In a process costing system, direct labor cost combined with manufacturing overhead cost is known as conversion cost.

14 Process costing is employed in industries that produce basically homogeneous

products such as bricks, flour, or cement but would not be appropriate for type operations such as those that manufacture computers

assembly-Ans: False AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 10 Level: Medium

15 Process costing is used where many different products are produced each period to customer specifications

Ans: False AACSB: Reflective Thinking AICPA BB: Critical Thinking AICPA FN: Reporting LO: 10 Level: Easy

Multiple Choice Questions

16 Which of the following statements related to job-order costing and process costing are true?

A) Under both costing methods, manufacturing overhead costs are included in the computation of unit product costs

B) Under both costing methods, the journal entry to record the completion of production will involve crediting a work in process account

C) Under both costing methods, the journal entry to record the cost of goods sold will involve crediting the finished goods account

D) All of the above are true

Ans: D AACSB: Analytic AICPA BB: Critical Thinking

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Job-order costing Process costing

Ans: B AACSB: Reflective Thinking AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 1 Level: Easy Source: CPA, adapted

18 In process costing, a separate work in process account is kept for each:

A) individual order

B) equivalent unit

C) processing department

D) cost category (i.e., materials, conversion cost)

Ans: C AACSB: Reflective Thinking AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 1 Level: Easy

19 The weighted-average method of process costing differs from the FIFO method of process costing in that the weighted-average method:

A) does not consider the degree of completion of beginning work in process

inventory when computing equivalent units of production

B) considers ending work in process inventory to be fully complete

C) will always yield a higher cost per equivalent unit

D) All of the above

Ans: A AACSB: Analytic AICPA BB: Critical Thinking

AICPA FN: Reporting Appendix: 4A LO: 2,3,5,6 Level: Hard

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20 Which of the following are needed to compute equivalent units for conversion costs under the weighted-average method of process costing?

Percentage completion ofbeginning work in process

Percentage completion ofending work in process

Ans: B AACSB: Reflective Thinking AICPA BB: Critical Thinking

21 Malcolm Company uses a weighted-average process costing system All materials at Malcolm are added at the beginning of the production process The equivalent units for materials at Malcolm would be the sum of:

A) units in ending work in process and the units started

B) units in beginning work in process and the units started

C) units in ending work in process and the units started and completed

D) units in beginning work in process and the units started and completed

Ans: B AACSB: Analytic AICPA BB: Critical Thinking

22 In the computation of costs per equivalent unit, the weighted-average method of process costing considers:

A) costs incurred during the current period only

B) costs incurred during the current period plus cost of ending work in process inventory

C) costs incurred during the current period plus cost of beginning work in process inventory

D) costs incurred during the current period less cost of beginning work in process inventory

Ans: C AACSB: Reflective Thinking AICPA BB: Critical Thinking

AICPA FN: Reporting LO: 3 Level: Easy Source: CPA, adapted

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Material cost assigned to beginning

work in process last period

Material cost added to productionduring the current period

Ans: A AACSB: Reflective Thinking AICPA BB: Critical Thinking

24 Under which of the following conditions will the FIFO method of process costing result in the same amount of cost being transferred to the next department as the weighted-average method?

A) When the beginning and ending inventories are each fifty percent complete.B) When there is no beginning inventory

C) When there is no ending inventory

D) When units in the beginning inventory are all completed and transferred at the same time

AICPA FN: Reporting Appendix: 4A LO: 4,7 Level: Hard

Source: CMA, adapted

25 In order to compute equivalent units of production using the FIF0 method of process costing, work for the period must be broken down into parts:

A) completed during the period and units in ending inventory

B) completed from beginning inventory, started and completed during the month, and units in ending inventory

C) started during the period and units transferred out during the period

D) processed during the period and units completed during the period

AICPA FN: Reporting Appendix: 4A LO: 5 Level: Medium

Source: CPA, adapted

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26 Which of the following methods of allocating service departments take into account all of the effects of interdepartmental services?

AICPA FN: Reporting Appendix: 4B LO: 8,9 Level: Medium

27 All of the following statements are correct when referring to process costing except:A) Process costing would be appropriate for a jeweler who makes custom jewelry

to order

B) A process costing system has the same basic purposes as a job-order costing system

C) Units produced are indistinguishable from each other

D) Costs are accumulated by department

Ans: A AACSB: Reflective Thinking AICPA BB: Critical Thinking

28 For which of the following would it be best to use an operation costing system?A) home remodeling

B) automobile production

C) cement used for roadways

D) trash bags used for yard waste

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Department at Health and is then transferred out and finished up in the Bottling

Department The finished cases of cola are then transferred to Finished Goods

Inventory The following information relates to Health's two departments for the month of January:

Mixing BottlingCases of cola in work in process, January 1 10,000 3,000

Cases of cola completed/transferred out during January 77,000 ?

Cases of cola in work in process, January 31 4,000 8,000

How many cases of cola were completed and transferred to Finished Goods Inventory during January?

A) 66,000

B) 71,000

C) 72,000

D) 74,000

Ans: C AACSB: Analytic AICPA BB: Critical Thinking

Solution:

To solve for units transferred:

+ Work in process, beginning 3,000

+ Units started into production during the month 77,000

− Work in process, ending 8,000

= Units completed and transferred out during the month 72,000

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30 The Assembly Department started the month with 83,000 units in its beginning work

in process inventory An additional 334,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department There were 34,000 units in the ending work in process inventory of the Assembly

Solution:

=Units completed and transferred out during the month 383,000

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Department, which is the first of two stages of its production process Information concerning the materials used in the Molding Department during March is as follows:

Units

MaterialsCostsWork in process at March 1 22,000 $11,000Units started during March 90,000 $46,120Units completed and transferred to next department

AICPA FN: Reporting LO: 2,3 Level: Medium Source: CPA, adapted

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To solve for ending work in process:

− Units completed and transferred out during the month 97,000

= Work in process, ending 15,000

Equivalent units of production

Materials

Transferred to next department 97,000

Ending work in process (materials: 15,000 units × 100%

complete) 15,000

Equivalent units of production 112,000

Cost per Equivalent Unit

Materials

Cost of beginning work in process $11,000

Cost added during the period 46,120

Total cost (a) $57,120

Equivalent units of production (b) 112,000

Cost per equivalent unit, (a) ÷ (b) $0.51

Materials

Ending work in process inventory:

Equivalent units of production (materials: 15,000 units ×

100% complete; conversion: 15,000 units × %

complete) 15,000

Cost per equivalent unit $0.51

Cost of ending work in process inventory $7,650

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Conversion costs were 75% complete with respect to the 4,000 units in work in

process at May 1 and 50% complete with respect to the 6,000 units in work in process

at May 31 During May, 12,000 units were completed and transferred to the next department An analysis of the costs relating to work in process at May 1 and to production activity for May follows:

Materials ConversionWork in process 5/1 $13,800 $3,740

Costs added during May $42,000 $26,260

The total cost per equivalent unit for May was:

A) $5.02

B) $5.10

C) $5.12

D) $5.25

AICPA FN: Reporting LO: 2,3 Level: Medium

Solution:

Materials Conversion

Transferred to next department 12,000 12,000

Ending work in process (materials: 6,000 units

× 100% complete; conversion: 6,000 units ×

50% complete) 6,000 3,000

Equivalent units of production 18,000 15,000

Materials Conversion Total

Cost of beginning work in process $13,800 $ 3,740

Cost added during the period 42,000 26,260

Total cost (a) $55,800 $30,000

Equivalent units of production (b) 18,000 15,000

Cost per equivalent unit, (a) ÷ (b) $3.10 $2.00 $5.10

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33 Maurice Company uses the weighted-average method in its process costing system The company adds materials at the beginning of the process in the Forming

Department, which is the first of two stages of its production process Information concerning the materials used in the Forming Department in April follows:

Units

MaterialsCostsWork in process at April 1 12,000 $6,000Units started during April 100,000 $51,120Units completed and transferred to next department

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To solve for ending work in process:

− Units completed and transferred out during the month 88,000

= Work in process, ending 24,000

Materials

Ending work in process (materials: 24,000 units × 100%

complete) 24,000

Materials

Cost of beginning work in process $ 6,000

Materials

Ending work in process inventory:

Equivalent units of production (materials: 24,000 units ×

100% complete) 24,000

Cost per equivalent unit $0.51

Cost of ending work in process inventory $12,240

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first processing department, the Welding Department, started the month with 10,000 units in its beginning work in process inventory that were 30% complete with respect

to conversion costs The conversion cost in this beginning work in process inventory was $19,200 An additional 60,000 units were started into production during the month There were 19,000 units in the ending work in process inventory of the

Welding Department that were 70% complete with respect to conversion costs A total

of $380,060 in conversion costs were incurred in the department during the month.What would be the cost per equivalent unit for conversion costs for the month?

(Round off to three decimal places.)

A) $6.400

B) $6.334

C) $6.209

D) $4.811

Solution:

Conversion

Ending work in process (conversion: 19,000 units × 70%

complete) 13,300

Conversion

Cost of beginning work in process $ 19,200

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PercentComplete withRespect toConversionBeginning work in process inventory 18,000 80%

Started into production during June 81,000

Ending work in process inventory 17,000 80%

According to the company's records, the conversion cost in beginning work in process inventory was $15,264 at the beginning of June Additional conversion costs of

$68,208 were incurred in the department during the month

What was the cost per equivalent unit for conversion costs for the month? (Round off

to three decimal places.)

A) $0.873

B) $0.696

C) $0.842

D) $1.060

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Conversion

Ending work in process

(conversion: 17,000 units × 80% complete) 13,600

Conversion

Cost of beginning work in process $15,264

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in its process costing system Conversion costs for Department B were 50% complete with respect to the 6,000 units in the beginning work in process and 75% complete with respect to the 8,000 units in the ending work in process A total of 12,000 units were completed and transferred out of Department B during February An analysis of the costs in Department B for February follows:

Transferred In Materials ConversionWork in process, February 1 $12,000 $2,500 $1,000

Costs added during February $29,000 $5,500 $5,000

The total cost per equivalent unit during February was closest to:

A) $2.75

B) $2.78

C) $2.82

D) $2.85

Solution:

Materials ConversionTransferred to next department 12,000 12,000Ending work in process:

Materials: 8,000 units × 100% complete 8,000

Conversion: 8,000 units × 75% complete 6,000Equivalent units of production 20,000 18,000

Transferred

In Materials Conversion TotalWork in process, beginning $12,000 $2,500 $1,000

Cost added during the month 29,000 5,500 5,000

Total cost (a) $41,000 $8,000 $6,000

Equivalent units (above) (b) 20,000 20,000 18,000

Cost per equivalent unit

(a) ÷ (b) $2.05 $0.40 $0.33 $2.78

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37 Hammoudi Company uses the weighted-average method in its process costing system.The first processing department, the Welding Department, started the month with 16,000 units in its beginning work in process inventory that were 90% complete with respect to conversion costs The conversion cost in this beginning work in process inventory was $61,920 An additional 53,000 units were started into production duringthe month and 45,000 units were completed in the Welding Department and

transferred to the next processing department There were 24,000 units in the ending work in process inventory of the Welding Department that were 70% complete with respect to conversion costs A total of $194,340 in conversion costs were incurred in the department during the month

What would be the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

A) $4.300

B) $4.147

C) $2.524

D) $3.667

Equivalent units of production (b) 61,800 Cost per equivalent unit, (a) ÷ (b) $4.147

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below summarize the department's operations in January.

Units

Transferred in from the prior

department during January 56,000

Completed and transferred to the next

The accounting records indicate that the conversion cost that had been assigned to beginning work in process inventory was $16,940 and a total of $347,320 in

conversion costs were incurred in the department during January

What was the cost per equivalent unit for conversion costs for January in the Molding Department? (Round off to three decimal places.)

A) $5.500

B) $5.666

C) $5.766

D) $6.202

Solution:

Units transferred out 58,400Add: equivalent units in the ending inventory (5300 × 90%

complete) 4,770Equivalent units of production 63,170Cost in the beginning inventory $ 16,940Cost added during the month 347,320Total cost $364,260

$364,260 ÷ 63,170 units = $5.766 per unit

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39 Jimmy Company uses the weighted-average method in its process costing system Theending work in process inventory consists of 9,000 units The ending work in process inventory is 100% complete with respect to materials and 70% complete with respect

to labor and overhead If the cost per equivalent unit for the period is $3.75 for

material and $1.25 for labor and overhead, what is the balance of the ending work in process inventory account?

A) $41,625

B) $33,750

C) $45,000

D) $31,500

Solution:

Ending work in process:

Materials: 9,000 units × 100% complete 9,000

Conversion: 9,000 units × 70% complete 6,300

Ending work in process: Materials Conversion TotalEquivalent units of production 9,000 6,300

Cost per equivalent unit $3.75 $1.25

Cost of ending work in process $33,750 $7,875 $41,625

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company sold 250,000 units in the month of January Data concerning inventories follow:

Units Inventory at January 1:

Work in process None

AICPA FN: Reporting LO: 2 Level: Medium Source: CPA, adapted

Solution:

To calculate units transferred out:

+ Ending finished goods inventory 60,000

− Beginning finished goods inventory 75,000

= Units transferred out 235,000

Units transferred out 235,000

Ending work in process (16,000 units × 75% complete) 12,000

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41 Jersey Company has a process costing system in which it uses the weighted-average method The equivalent units for conversion costs for the month were 47,500 units The beginning work in process inventory consisted of 15,000 units, 60% complete with respect to conversion costs The ending work in process inventory consisted of 10,000 units, 75% complete with respect to conversion costs The number of units started during the month was:

A) 25,000 units

B) 34,000 units

C) 35,000 units

D) 40,000 units

Solution:

Units transferred out 40,000 *

Equivalent units for conversion costs 47,500

* Solve backwards: 47,500 − 7,500 = 40,000

Units in beginning inventory 15,000

+ Units started 35,000 *

− Units in ending inventory 10,000

* Solve backwards: Units started = 40,000 −15,000 + 10,000 = 35,000

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process inventory that were 80% complete with respect to conversion costs An

additional 52,000 units were transferred in from the prior department during the month

to begin processing in the Assembly Department There were 18,000 units in the ending work in process inventory of the Assembly Department that were 20%

complete with respect to conversion costs

What were the equivalent units for conversion costs in the Assembly Department for the month?

A) 43,600

B) 40,000

C) 38,800

D) 64,000

Solution:

Work in process, beginning 6,000

ConversionTransferred to next department 40,000

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43 Jolly Company uses the weighted-average method in its process costing system Operating data for the Painting Department for the month of April appear below:

Units

PercentCompletewithRespect toConversionBeginning work in process inventory 4,700 90%Transferred in from the prior department during April 59,700

Ending work in process inventory 7,300 80%What were the equivalent units for conversion costs in the Painting Department for April?

A) 62,940

B) 62,300

C) 65,540

D) 57,100

Solution:

Units in beginning inventory 4,700

+ Units started into production 59,700

Equivalent units transferred out 57,100

Add: Equivalent units in the ending work in process

inventory (7,300 units × 80% complete) 5,840Equivalent units for conversion costs 62,940

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60% complete with respect to conversion costs At the end of the year, 6,500 units were in process, 40% complete with respect to conversion costs During the year, 30,000 units were completed and transferred on to the next department The equivalentunits for conversion costs would be:

A) 32,600 units

B) 29,600 units

C) 33,000 units

D) 30,000 units

Solution:

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45 Bart Co adds materials at the beginning of the process in Department M The

company uses the weighted-average method in its process costing system The

following information pertains to Department M's work in process during April:

UnitsWork in process, April 1 (conversion 60% complete) 3,000

Started in April 25,000

Completed 20,000

Work in process, April 30 (conversion 75% complete) 8,000

The equivalent units for conversion cost are:

A) 26,000

B) 25,000

C) 24,200

D) 21,800

Solution:

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process inventory that were 20% complete with respect to conversion costs An

additional 95,000 units were transferred in from the prior department during the month

to begin processing in the Assembly Department During the month 102,000 units were completed in the Assembly Department and transferred to the next processing department There were 1,000 units in the ending work in process inventory of the Assembly Department that were 20% complete with respect to conversion costs.What were the equivalent units for conversion costs in the Assembly Department for the month?

A) 102,200

B) 100,600

C) 102,000

D) 88,000

Solution:

inventory (1,000 units × 20% complete) 200Equivalent units for conversion costs 102,200

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47 Natiello Corporation uses the weighted-average method in its process costing system Operating data for the Lubricating Department for the month of October appear below:

Units

PercentCompletewith Respect

to ConversionBeginning work in process inventory 9,100 20%Transferred in from the prior department during

A) 41,000

B) 43,120

C) 36,000

D) 45,620

Solution:

Units in beginning inventory 9,100+ Units started into production 38,500

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respect to conversion cost During April, 10,000 units were completed At April 30, 4,000 units remained in work in process and they were 40% complete with respect to conversion cost Direct materials are added at the beginning of the process How manyunits were started during April?

A) 9,000

B) 9,800

C) 10,000

D) 11,000

Solution:

To solve for units started into production:

+ Work in process, ending 4,000

+ Units completed and transferred out during the month 10,000

− Work in process, beginning 3,000

= Units started into production during the month 11,000

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49 Pelican Corporation uses a weighted-average process costing system to collect costs related to production The following selected information relates to production for March:

Units completed and transferred out 5,000

Units in work in process, March 31 800

Equivalent units, materials 5,800

Equivalent units, conversion costs 5,200

Materials ConversionCosts in work in process on March 1 $ 2,900 $ 4,680

Costs added to production during March 71,050 131,040

Total cost $73,950 $135,720

All materials at Pelican are added at the beginning of the production process

Conversion costs are incurred uniformly over the production process What total

amount of cost should be assigned to the units in work in process at the end of March?A) $14,840

B) $15,420

C) $24,920

D) $25,860

AICPA FN: Reporting LO: 3,4 Level: Hard

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equivalent units for materials were 40,000 under the weighted-average method and 36,000 under the FIFO method Kwan's costs for October were as follows:

Cost in beginning work in process (October 1) $ 25,200

Cost added to production during October 262,800

AICPA FN: Reporting Appendix: 4A LO: 3,6 Level: Medium

Solution:

Weighted-Average FIFOTotal cost $288,000 $262,800

÷ Equivalent units 40,000 36,000

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51 Safia Corporation uses the weighted-average method in its process costing system The Fitting Department is the second department in its production process The data below summarize the department's operations in March.

Units

Transferred in from the prior department during

March 67,000

The Fitting Department's cost per equivalent unit for conversion cost for March was

Solution:

Units in beginning inventory 3,300+ Units transferred in 67,000

× Cost per equivalent unit $4.70

$304,090

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Beginning work in process inventory:

Cost $19,000

Units 30,000 units

Percentage completion with respect to materials 100%

Percentage completion with respect to conversion 60%

Units completed and transferred out 82,000 units

Cost per equivalent unit:

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53 Wit Company uses the weighted-average method in its process costing system

Information for the month of May concerning Department A, the first stage of the company's production process follows:

Materials ConversionWork in process, beginning $ 4,000 $ 3,000

Current costs added 20,000 16,000

Total costs $24,000 $19,000

Equivalent units 100,000 95,000

Costs per equivalent unit $0.24 $0.20

Goods completed 90,000 units

Work in process, ending 10,000 units

Material costs are added at the beginning of the process The ending work in process is50% complete with respect to conversion costs How would the costs be distributed?Goods completed and transferred out Ending work in process

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Materials ConversionTransferred to next department 90,000 90,000

Ending work in process:

Materials: 10,000 units × 100%

complete 10,000Conversion: 10,000 units × 50%

complete 5,000Equivalent units of production 100,000 95,000

Materials ConversionWork in process, beginning $ 4,000 $ 3,000

Cost added during the month 20,000 16,000

Total cost (a) $24,000 $19,000

Equivalent units (above) (b) 100,000 95,000

Cost per equivalent unit (a) ÷ (b) $0.24 $0.20

Materials Conversion TotalUnits transferred out 90,000 90,000

Cost transferred out $21,600 $18,000 $39,600

Materials Conversion TotalEquivalent units of production:

ending work in process 10,000 5,000Cost per equivalent unit $0.24 $0.20

Cost of ending work in process $2,400 $1,000 $3,400

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54 Lap Company uses the weighted-average method in its process costing system The beginning work in process inventory in a particular department consisted of 80,000 units, 100% complete with respect to materials and 25% complete with respect to conversion costs The total dollar value of this inventory was $226,000 During the month, 150,000 units were transferred out of the department The costs per equivalent unit for the month were $2.00 for materials and $3.50 for conversion costs The value

of the units completed and transferred out of the department was:

A) $681,000

B) $765,000

C) $821,000

D) $825,000

Solution:

150,000 units × ($2.00 + $3.50) = $825,000

55 Bly Company uses the weighted-average method in its process costing system DuringMarch, Bly Company's Department Y costs per equivalent unit were as follows:Materials $1

Conversion $3

Transferred-in $5

There were 4,000 units (40% complete with respect to conversion cost and 0%

complete with respect to materials cost) in Work in Process at March 31 The total costs assigned to the March 31, Work in Process inventory should be:

A) $36,000

B) $28,800

C) $27,200

D) $24,800

AICPA FN: Reporting LO: 4 Level: Hard Source: CPA, adapted

Solution:

Ending work in process: Conversion costs (4,000 × 40%) × $3 $ 4,800Transferred in costs (4,000 × $5) 20,000Total cost: Work in process, March 31 $24,800

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Total cost transferred out during March $74,000

Cost in Work in Process, March 1 $12,000

Cost in Work in Process, March 31 $5,000

How much cost did Fystro add to production during March?

A) $57,000

B) $62,000

C) $67,000

D) $81,000

Solution:

Work in process, ending $ 5,000

+ Cost transferred out during the month 74,000

− Work in process, beginning 12,000

= Cost added to production during the month $67,000

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57 Rangan Corporation uses the weighted-average method in its process costing system The Molding Department is the second department in its production process The data below summarize the department's operations in January.

Units

Transferred in from the prior department

during January 76,000

Completed and transferred to the next

The Molding Department's cost per equivalent unit for conversion cost for January was $3.91

How much conversion cost was assigned to the ending work in process inventory in the Molding Department for January?

A) $10,674.30

B) $15,249.00

C) $4,574.70

D) $4,105.50

Solution:

Equivalent units in ending inventory: 3,900 units × 70%

complete 2,730

× $3.91Conversion costs in ending work in process inventory $10,674.30

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conversion, and the ending work in process inventory was 50% complete with respect

to conversion Information on units processed and conversion costs incurred during May follow:

Units

ConversionCostWork in process inventory on May 1 25,000 $22,000

Units started into production, and costs incurred

during the month 135,000 $143,000Units completed and transferred to finished

goods during the month 100,000Work in process inventory on May 31 60,000

The amount of conversion cost in the ending work in process inventory was:

A) $33,000

B) $38,100

C) $39,000

D) $45,000

AICPA FN: Reporting Appendix: 4A LO: 5,6,7 Level: Medium

Source: CMA, adapted

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