Reference: 04-12
GK Manufacturing had inventory at May 1 of 5,000 units which were 70% complete as to conversion costs. The
May 1 inventory had total costs of $ 69,900 which included $ 21,500 direct materials, $ 38,775 direct labour and
$ 9,625 factory overhead.
Costs added to work in process in May were as follows:
$$\begin{array} { | l | l | }
\hline \text { Direct materials } & \$ 298,800 \
\hline \text { Direct labour } & \$ 540,800 \
\hline \text { Factory overhead } & \$ 135,400 \
\hline
\end{array}$$ During May, 49,200 units were completed, including those in inventory on May 1. On May 30, the inventory of work in process consisted of 5,600 units which were 3/8 completed as to conversion costs. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process.
-What amount below was the total cost of units completed during May closest to
A)$1,044,900.
B)$981,755.
C)$911,685.
D)$975,000.

Question

Reference: 04-12
GK Manufacturing had inventory at May 1 of 5,000 units which were 70% complete as to conversion costs. The
May 1 inventory had total costs of $ 69,900 which included $ 21,500 direct materials, $ 38,775 direct labour and
$ 9,625 factory overhead.
Costs added to work in process in May were as follows:
 $$\begin{array} { | l | l | } 
\hline \text { Direct materials } & \$ 298,800 \
\hline \text { Direct labour } & \$ 540,800 \
\hline \text { Factory overhead } & \$ 135,400 \
\hline
\end{array}$$ During May, 49,200 units were completed, including those in inventory on May 1. On May 30, the inventory of work in process consisted of 5,600 units which were 3/8 completed as to conversion costs. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process.
-What amount below was the total cost of units completed during May closest to
A)$1,044,900.
B)$981,755.
C)$911,685.
D)$975,000.

Quizplus · Accepted Answer

The total cost of units completed during May can be calculated by adding the costs of beginning inventory and costs added during May, then subtracting the ending inventory costs. Since materials are added at the beginning, all units (including those in beginning and ending inventory) are 100% complete for materials. For conversion costs, the completion percentage varies. The calculation involves determining the cost per unit for materials and conversion costs, then applying these costs to the units completed and adjusting for the percentage completion of the beginning and ending inventories. The closest total cost for units completed during May, based on the provided data and method, is option B) $981,755.

Reference: 04-12 GK Manufacturing Had Inventory at May 1 of 5,000

Reference: 04-12
GK Manufacturing Had Inventory at May 1 of 5,000