195. Correct answer c. Oster’s October manufacturing cost should be assigned $1,155,000 to
production completed and $235,000 to work-in-process inventory calculated as follows.
Material at 100% = ($700,000 + $40,000) ÷ (60,000 + 20,000)
= $740,000 ÷ 80,000
= $9.25/unit
Equivalent conversion units = 60,000 + (20,000 x .25)
= 65,000 units
Conversion cost = ($32,500 + $617,500) ÷ 65,000
= $10/unit
Cost of production = 60,000 x ($9.25 + $10)
= $1,155,000
Cost of work-in-process = (20,000 x $9.25) + (5,000 x $10)
= $235,000
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