FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Edwards manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection occurs when units are 60% converted. Normal spoilage, if any, generally constitute 4% of the good units - units that successfully passed the inspection in current month. Company use FIFO
method.
Data for May 2021 are as follows:
WIP, beginning inventory 5/1/2021 24,200 units
Direct materials (100% complete)
Conversion costs (75% complete)
Started during December 83,600 units
Completed and transferred out 5/31/2021 79,200 units
WIP, ending inventory 5/31/2021 19,800 units
Direct materials (100% complete)
Conversion costs (65% complete)
Costs for December:
WIP, beginning Inventory:
Direct materials $ 165,000
Conversion costs 84,480
Direct materials added 244,640
Conversion costs added 319,000
What amount of conversion costs is assigned to the ending Work-in-Process account for May?
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