Reference: 04-12
GK Manufacturing Had Inventory at May 1 of 5,000

question 86

Multiple Choice

Reference: 04-12
GK Manufacturing had inventory at May 1 of 5,000 units which were 70% complete as to conversion costs. The
May 1 inventory had total costs of $ 69,900 which included $ 21,500 direct materials, $ 38,775 direct labour and
$ 9,625 factory overhead.
Costs added to work in process in May were as follows:
$$\begin{array} { | l | l | } \hline \text { Direct materials } & \$ 298,800 \\\hline \text { Direct labour } & \$ 540,800 \\\hline \text { Factory overhead } & \$ 135,400 \\\hline\end{array}$$ During May, 49,200 units were completed, including those in inventory on May 1. On May 30, the inventory of work in process consisted of 5,600 units which were 3/8 completed as to conversion costs. Inventories are costed by the first-in, first-out method and all materials are added at the beginning of the process.
-What amount below was the total cost of units completed during May closest to

• A)$1,044,900.
• B)$981,755.
• C)$911,685.
• D)$975,000.

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Definitions:

Service Business

A type of business that provides intangible products or services to customers, rather than producing tangible goods.

Health Club

A facility that offers health and fitness services, including exercise equipment, fitness classes, and sometimes additional amenities like pools and spas.

Manufacturing Business

A company that produces goods using labor, equipment, and materials, often on a large scale.

Dressmaking Company

A business specializing in creating custom clothing and alterations.