Suppose Hill Manufacturing began production in January with zero units in process.During January, Hill started production of 18,000 units and completed 15,500 units by January 31.Manufacturing costs totaled $68,800 ($43,200 for materials and $25,600 for labor and overhead).How much cost is allocated to WIP ending inventory?
A)$59,245
B)$19,600
C)$9,555
D)$68,800
E)None of the above.

Question

Quizplus · Accepted Answer

The cost per unit is $68,800 / 18,000 = $3.8222. The ending WIP inventory is 18,000 - 15,500 = 2,500 units. Therefore, the cost allocated to WIP ending inventory is 2,500 * $3.8222 = $9,555.

Suppose Hill Manufacturing Began Production in January with Zero Units