31. Kimbeth Manufacturing uses process costing to control costs in the manufactu

Question

31. 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. (CMA Exam adapted) Work in process, November 1st Started in production during November Work in process, November 30th Units 16,000 100,000 24,000 The beginning inventory was 60% cornplete 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, $54,560; direct labor, $20,320; manufacturing overhead, $15,240. Costs incurred during the month: direct materials, $468,000; direct labor, $182,880; manufacturing overhead, $391,160. What are the total costs in the ending Work-in-Process Inventory assuming Kimbeth uses first-in, first-out (FIFO) process costing? A. $153,168 B. $154,800. C. $155,328. D. $156,960. E. $159,648

Explanation / Answer

A.$153,168 is correct.

Particulars Direct materials Conversion Total costs Work in process, beginning              54,560              35,560         90,120 Total costs incurred in January           468,000           574,040    1,042,040 Total costs to account for           522,560           609,600    1,132,160 Costs added in current period           468,000           574,040 Divide by equivalent units of work done in current period           104,000              98,400 Cost per equivalent unit of work done in current period                  4.50                  5.83 Costs allocated to completed and partially completed units: for units completed and transferred out Inventory in process, Nov 1 balance              54,560              35,560         90,120 Costs incurred in Nov to complete wip, beginning              28,800              74,672       103,472 Costs of completed beginning wip              83,360           110,232       193,592 costs of units started and completed           342,000           443,364       785,364 Total costs of units completed and transferred out to finished goods           425,360           553,596       978,956 WIP ending              97,200              55,968       153,168 [21,600*4.5] [9,600*5.83] Total costs accounted for by           522,560           609,564    1,132,124

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