Data for MayUnits:Beginning Work in ProcessInventoryShaping DepartmentInsertion Department30,000 unitsProduction started100,000 unitsTransferred in From Previous80,000 unitsDepartmentCompleted Goods Inv.80,000 units100,000 unitsEnding WIP Inv.20,000 units10,000 unitsCompleted as to Direct Material% 40Completed as to Convers. WorkCosts:% 30% 90% 50Beginning Work in ProcessInventoryTransferred in from PreviousDepartmentDirect Materials AddedConversion Costs Added$352,000$258,000What is the cost of finished goods inventory in Insertion Department?a. $1,150,000$100,000$560,000$218,000$ 367,500b. $600,000c. $550,000d. $1,000,000

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Business

Accounting

What is the cost of finished goods inventory in Insertion Department?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Accounting

Inventory accounting is that branch of accounting that helps in determining the specific value of assets at different stages of production and development.

Question

Data for May
Units:
Beginning Work in Process
Inventory
Shaping Department
Insertion Department
30,000 units
Production started
100,000 units
Transferred in From Previous
80,000 units
Department
Completed Goods Inv.
80,000 units
100,000 units
Ending WIP Inv.
20,000 units
10,000 units
Completed as to Direct Material
% 40
Completed as to Convers. Work
Costs:
% 30
% 90
% 50
Beginning Work in Process
Inventory
Transferred in from Previous
Department
Direct Materials Added
Conversion Costs Added
$352,000
$258,000
What is the cost of finished goods inventory in Insertion Department?
a. $1,150,000
$100,000
$560,000
$218,000
$ 367,500
b. $600,000
c. $550,000
d. $1,000,000

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