The Nesting Company manufactures birdhouses in a single manufacturing process. The following information has been provided by Nesting Company: $$\begin{array} { | l | l | }
\hline \text { Work in process inventory, Jan. } 1 & - 0 - \text { units } \
\hline \text { Units started in production } & 14,000 \text { units } \
\hline \text { Work in process inventory, Dec. } 31 & 5,000 \text { units } \
\hline \text { Production costs: } & \
\hline \text { Direct materials } & \$ 38,500 \
\hline \text { Direct labor } & \$ 13,975 \
\hline \text { Manufacturing overhead } & \$ 8,600 \
\hline
\end{array}$$ The ending work in process was 100% complete with respect to direct materials and 35% complete with respect to conversion costs. What was the total cost of the ending work in process inventory?

Question

The Nesting Company manufactures birdhouses in a single manufacturing process. The following information has been provided by Nesting Company: $$\begin{array} { | l | l | } 
\hline \text { Work in process inventory, Jan. } 1 & - 0 - \text { units } \
\hline \text { Units started in production } & 14,000 \text { units } \
\hline \text { Work in process inventory, Dec. } 31 & 5,000 \text { units } \
\hline \text { Production costs: } & \
\hline \text { Direct materials } & \$ 38,500 \
\hline \text { Direct labor } & \$ 13,975 \
\hline \text { Manufacturing overhead } & \$ 8,600 \
\hline
\end{array}$$ The ending work in process was 100% complete with respect to direct materials and 35% complete with respect to conversion costs. What was the total cost of the ending work in process inventory?

Quizplus · Accepted Answer

$17,425To calculate the total cost of the ending work in process inventory, we need to consider the costs related to direct materials and conversion costs (direct labor + manufacturing overhead) and their respective completion percentages. The ending work in process inventory is 100% complete with respect to direct materials and 35% complete with respect to conversion costs.Direct materials cost for the ending work in process inventory is 100% of the direct materials cost, which is $38,500.Conversion costs (direct labor + manufacturing overhead) = $13,975 (direct labor) + $8,600 (manufacturing overhead) = $22,575. The ending work in process inventory is 35% complete with respect to these costs, so 35% of $22,575 = 0.35 * $22,575 = $7,901.25.Total cost of the ending work in process inventory = Direct materials cost + Conversion costs = $38,500 + $7,901.25 = $46,401.25.However, none of the provided options match this calculation. It seems there was a mistake in my calculation. Let's correct it:The correct approach is to calculate the costs specifically allocated to the ending work in process inventory based on the given completion percentages.Direct materials: 100% of $38,500 for the 5,000 units in ending WIP = $38,500.Conversion costs for the 5,000 units in ending WIP: 35% of (Direct labor + Manufacturing overhead) = 35% of ($13,975 + $8,600) = 35% of $22,575 = $7,901.25.However, it seems there was a mistake in interpreting the options and the calculation process. The correct calculation should focus on the costs associated with the ending work in process inventory, considering the provided completion percentages and the total costs.Given the mistake in the initial explanation and calculation, let's correct the approach based on the provided information:- Direct materials are 100% complete, so all direct materials costs are allocated to the ending inventory.- Conversion costs (Direct labor + Manufacturing overhead) are only 35% complete.The correct calculation should involve determining the portion of the conversion costs attributable to the ending work in process inventory based on the 35% completion rate. However, without the correct breakdown of costs directly attributable to the ending inventory based on the provided options, the initial calculation provided does not accurately reflect the correct methodology for determining the total cost of the ending work in process inventory.Given the error in the initial explanation and calculation, the correct answer should be recalculated based on the specific costs and completion percentages provided. However, the initial response mistakenly provided an incorrect total and explanation. The correct methodology involves applying the completion percentages to the respective cost components (direct materials and conversion costs) to find the total cost attributable to the ending work in process inventory.

The Nesting Company Manufactures Birdhouses in a Single Manufacturing Process