Kimbeth Manufacturing uses process costing to control costs in the manufacture o

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. (CMA Exam adapted) 33. Units 16,000 100,000 24,000 Work in process, November 1st Started in production during November Work in process, November 30th 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, $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 is the equivalent unit cost for the conversion costs assuming Kimbeth uses weighted-average process costing? A. $5.65 B. $5.83. C. $6.00. D. $6.20 E. $6.62.

Explanation / Answer

33 Units completed and transferred out 92000 =16000+100000-24000 Work In Process, November 30 9600 =24000*40% Equivalent units for conversion costs 101600 Costs of beginning work in process 35560 =20320+15240 Costs incurred this period 574040 =182880+391160 Total costs 609600 ÷ Equivalent units of production 101600 Equivalent unit costs for conversion costs 6.00 Option C is correct

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