Adam Plastics, Inc., manufactures plastic moldings for car seats. Its costing sy

Question

Adam Plastics, Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

Data for February 2012 are:
Work in process, beginning inventory, 200 units.
Units started during February 600 units
Work in process, ending inventory, 100 units
30% complete as to conversion costs
100% complete as to materials

Costs:
Work in process, beginning inventory:
Direct materials $200,000
Conversion costs $200,000

Direct materials costs added during February $2,000,000
Conversion costs added during February $2,500,000


What is the cost assigned to Ending WIP (Ending Inventory) in February?

$393,162.50

$4,900,000

$385,958.90

None of the above

A.

$393,162.50

B.

$4,900,000

C.

$385,958.90

D.

None of the above

Explanation / Answer

Answer: Option C $385,958.90.

Calculations are shown below:

QUANTITY SCHEDULE Beginning WIP 200 Units started during the month 600 Units to be accounted for 800 Units completed and transferred out 700 Ending WIP 100 Units accounted for 800 Computation of Equivalent Units of Production (Weighted Averge Method) Physical Equivalent Units Units Material Conversion Units completed and transferrred out 700 700 700 Ending WIP 100 100 30 800 800 730 Costs incurred during the month (including beginning WIP costs) 2200000 2700000 Costs per equivalent unit 2750 3698.63 Costs to be accounted for: Material Conversion Total Costs in beginning inventory 200000 200000 400000 Costs added during the month 2000000 2500000 4500000 2200000 2700000 4900000 Costs accounted for Units transferred out 1925000.00 2589041.10 4514041.10 Ending WIP 275000.00 110958.90 385958.90 2200000.00 2700000.00 4900000.00

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.