Bentley Enterprises 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)
Units
Work in process, November 1 st 16,000
Started in production during November 100,000
Work in process, November 30 th 24,000
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.
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What are the total costs in the ending Work-in-Process Inventory assuming Bentley uses first-in, first-out (FIFO) process costing?
A) $153,168.
B) $154,800.
C) $155,328.
D) $156,960.

Question

Quizplus · Accepted Answer

The total costs in the ending Work-in-Process Inventory assuming Bentley uses first-in, first-out (FIFO) process costing is $153,168.FIFO assumes that the first costs incurred are the first costs assigned to units completed and transferred out. Therefore, the costs of the beginning inventory are assigned to the first 16,000 units completed and transferred out. The costs incurred during the month are then assigned to the remaining 84,000 units completed and transferred out.The total costs in the ending Work-in-Process Inventory are the costs of the 24,000 units that are still in process at the end of the month. These costs include the costs of the materials, labor, and overhead that have been incurred up to that point.The costs of the materials in the ending Work-in-Process Inventory are $75,600 (24,000 units x $3.15 per unit). The costs of the labor in the ending Work-in-Process Inventory are $38,400 (24,000 units x $1.60 per unit). The costs of the overhead in the ending Work-in-Process Inventory are $40,168 (24,000 units x $1.67 per unit).The total costs in the ending Work-in-Process Inventory are $153,168 ($75,600 + $38,400 + $40,168).

Bentley Enterprises Uses Process Costing to Control Costs in the Manufacture