Star Company manufactures expensive chairs. The following data relates to the mo
ID: 2589383 • Letter: S
Question
Star Company manufactures expensive chairs.
The following data relates to the month of January 2006.
Units
Beginning Work in Process (1-1-06)
10,000
Completed and transferred out during January
60,000
Ending Work in Process (31-1-06)
20,000
Costs added during January
Percentage of Completion
Beginning Work in Process (1-1-06)
50%
Ending Work in Process (31-1-06)
40%
Costs added during January
Total costs
Beginning Work in Process (1-1-06)
$10,000
Costs added during January
$110,000
Conversion costs
Beginning Work in Process (1-1-06)
$5,000
Costs added during January
$50,000
The company uses Weighted Average Process Costing Method and materials are added at the beginning of process.
The cost added during the month for material =
$60,000.00
$78,000.00
$80,000.00
$88,000.00
Star Company manufactures expensive chairs.
The following data relates to the month of January 2006.
Units
Beginning Work in Process (1-1-06)
10,000
Completed and transferred out during January
60,000
Ending Work in Process (31-1-06)
20,000
Costs added during January
Percentage of Completion
Beginning Work in Process (1-1-06)
50%
Ending Work in Process (31-1-06)
40%
Costs added during January
Total costs
Beginning Work in Process (1-1-06)
$10,000
Costs added during January
$110,000
Conversion costs
Beginning Work in Process (1-1-06)
$5,000
Costs added during January
$50,000
The company uses Weighted Average Process Costing Method and materials are added at the beginning of process.
The cost added during the month for material =
a.$60,000.00
b.$78,000.00
c.$80,000.00
d.$88,000.00
Explanation / Answer
The option a. $60,000 is correct.
Explanation:
The cost added during the month for material
= Total cost added during the month - Conversion costs added during January
= $110,000 - $50,000
= $60,000
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