Wilson Inc

question 4

Multiple Choice

Wilson Inc. uses process costing. Its Sanitizing Department had no beginning Work in Process inventory, though it added materials of $120,000 and conversion costs totaling $160,000 during May. Materials are added at the beginning of the process and conversion costs are added evenly throughout the process. During May, 75,000 units were completed. The May 31 Work in Process inventory balance consisted of 25,000 units that were 20% complete. What is the cost of the ending Work in Process inventory?

• A) $240,000
• B) $56,000
• C) $280,000
• D) $40,000

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Definitions:

MH

Often used as an abbreviation for "machine hours," representing the amount of time machines are operated in the production process.

Variable Overhead Rate Variance

The difference between actual variable overhead incurred and the standard cost allocated based on activity level.

Variable Overhead Rate Variance

The difference between actual variable overhead costs incurred and the standard variable overhead costs expected for the actual production level.

Fixed Manufacturing Overhead Budget Variance

The discrepancy between the budgeted fixed overhead costs and the actual fixed overhead incurred during production.