Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing sy
ID: 2539433 • Letter: C
Question
Charlie Chairs Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Conversion costs are allocated evenly throughout production.
are:
Work in process, beginning inventory, 50% complete formaterials, 25% complete for conversion
400 units
Units started during February
1,000 units
Work in process, ending inventory, 40% complete formaterials, 10% complete for conversion
250 units
are:
Work in process, beginning inventory:
Direct materials
$4,500
Conversion costs
$17,500
Direct materials costs added during February
$10,500
Conversion costs added during February
$43,000
What was the total cost of ending work in process inventory in Department A at the end of February?
A.$36,000
B.$22,000
C.$2,000
D.$53,500
Data for Department A for February 2017are:
Work in process, beginning inventory, 50% complete formaterials, 25% complete for conversion
400 units
Units started during February
1,000 units
Work in process, ending inventory, 40% complete formaterials, 10% complete for conversion
250 units
Costs for Department A for February 2017are:
Work in process, beginning inventory:
Direct materials
$4,500
Conversion costs
$17,500
Direct materials costs added during February
$10,500
Conversion costs added during February
$43,000
Explanation / Answer
Physical units Materials Conversion Beginning work in process 400 200 300 Units started and completed 750 750 750 Ending work in process 250 100 25 Equivalent units 1400 1050 1075 Materials Conversion Current costss 10500 43000 Equivalent units 1050 1075 Cost per Equivalent unit 10 40 Total cost of ending work in process inventory =(100*10)+(25*40)= $2000 Option C is correct