Bentley Enterprises Uses Process Costing to Control Costs in the Manufacture

question 143

Multiple Choice

Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the mining industry. The following information pertains to operations for November. (CMA Exam adapted)
$$\begin{array} { l c } & \text { Units } \\\text { Work in process, Novernber } 1 & 16,000 \\\text { Started in production during Novernber } & 100,000 \\\text { Wark in process, Novernber } 30 & 24,000\end{array}$$
The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs. The ending inventory was 90% complete as to materials and 40% complete as to conversion costs.
Costs pertaining to November are as follows:
Beginning inventory: direct materials, $54,560; direct labor, $20,320; manufacturing overhead, $15,240.
Costs incurred during the month: direct materials, $468,000; direct labor, $182,880; manufacturing overhead, $391,160.
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What is the equivalent unit cost for materials assuming Bentley uses weighted-average process costing?

• A) $4.12.
• B) $4.50.
• C) $4.60.
• D) $4.80.

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Definitions:

Floating Interest

An interest rate that changes over the life of a loan or mortgage, based on the current market conditions or an index.

Solvency

The ability of an entity to meet its long-term debts and financial obligations.

Times Interest Earned Ratio

A financial ratio that measures a company's ability to meet its debt obligations by comparing its income before interest and taxes to its interest expenses.

Inventory Turnover

A measure of how quickly a company sells its inventory within a given period, indicating the efficiency in managing and selling products.