Ankenbauer Company manufactures keyboards in a two-department process, Assembly and Finishing. Information on the first department, Assembly, follows:
There was no beginning inventory, and of the 400,000 units started in production 336,000 were completed and transferred to the Finishing department, while 64,000 units were still in process. These units had all materials added but were only 75 percent complete as far as conversion costs.
-The total cost of ending work-in-process inventory is
A) $704,000.
B) $584,000.
C) $528,000.
D) $480,000.

Question

Ankenbauer Company manufactures keyboards in a two-department process, Assembly and Finishing. Information on the first department, Assembly, follows:
  There was no beginning inventory, and of the 400,000 units started in production 336,000 were completed and transferred to the Finishing department, while 64,000 units were still in process. These units had all materials added but were only 75 percent complete as far as conversion costs.
-The total cost of ending work-in-process inventory is
A) $704,000. 
B) $584,000. 
C) $528,000. 
D) $480,000.

Quizplus · Accepted Answer

To calculate the total cost of ending work-in-process inventory, we need to determine the materials cost and conversion costs incurred for the 64,000 units still in process.

Materials cost per unit = $1.20
Total materials cost = (64,000 units x $1.20 per unit) = $76,800

Conversion costs per unit = ($2.60 x 75%) = $1.95
Total conversion costs = (64,000 units x $1.95 per unit) = $124,800

Total cost of ending work-in-process inventory = Materials cost + Conversion costs
= $76,800 + $124,800 = $201,600

Therefore, the best answer choice is B ($584,000 - $201,600 = $382,400 ending inventory cost).

Ankenbauer Company Manufactures Keyboards in a Two-Department Process, Assembly and Finishing