Reference: 04-09
Kimbeth Manufacturing Makes Dust Density Sensors (DDS), a Safety

question 23

Multiple Choice

Reference: 04-09
Kimbeth Manufacturing makes Dust Density Sensors (DDS) , a safety device for the mining industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May: $\begin{array}{|l|l|}\hline & \text { Units } \\\hline \text { Beginning work in process inventory } & 16,000 \\\hline \text { Started into production during May } & 100,000 \\\hline \text { Completed during May } & 92,000 \\\hline \text { Ending work in process inventory } & 24,000 \\\hline\end{array}$
The beginning work in process inventory was $60 \%$ complete with respect to materials and $20 \%$ complete with respect to conversion costs. The ending work in process inventory was $90 \%$ complete with respect to materials and $40 \%$ complete with respect to conversion costs. The costs were as follows:
$\begin{array}{|l|l|l|}\hline & \text { Conversion } & \text { Materials } \\\hline \text { Beginning work in process inventory } & \$ 54,560 & \$ 35,560 \\\hline \text { Costs incurred during May } & \$ 468,000 & \$ 574,040 \\\hline\end{array}$
-Using the weighted-average method, the cost per equivalent unit of conversion cost for May is

• A)$5.14.
• B)$5.68.
• C)$6.41.
• D)$6.00.

Assess the effect of special orders on net operating income, including considerations of variable costs, fixed costs, and capacity.

Determine the financial impact of accepting a special order by considering modification costs and potential benefits.

Understand the role of fixed costs in decisions to suspend operations and how variable and fixed costs affect such decisions.

Evaluate the decision to accept or reject a special order based on predetermined overhead rates and the impact on total net operating income.