RST Corporation produces 70,000 cell phones per year. The company estimates its direct material costs for the cell phone to be $400 per unit and its conversion costs (direct labor plus support) to be $500 per unit. Annual inventory carrying costs, not included in these costs are estimated to be 10%. 14. RST's average inventory levels are estimated as follows: Direct material Work in process (100% complete for materials and (50% complete for conversion) Finished goods 2 months of production 2 months of production 1 month of production What is RST's annual inventory carrying costs? A) $1,500,000 B) $1,650,000 C) $1,750,000 D) $2,000,000

RST Corporation produces 70,000 cell phones per year. The company estimates its direct material costs for the cell phone to be $400 per unit and its conversion costs (direct labor plus support) to be $500 per unit. Annual inventory carrying costs, not included in these costs are estimated to be 10%. 14. RST's average inventory levels are estimated as follows: Direct material Work in process (100% complete for materials and (50% complete for conversion) Finished goods 2 months of production 2 months of production 1 month of production What is RST's annual inventory carrying costs? A) $1,500,000 B) $1,650,000 C) $1,750,000 D) $2,000,000

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter5: Process Costing

Section: Chapter Questions

Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...

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