Beginning Work in Process Consists of 7,000 Units, 55% Complete

question 82

Multiple Choice

Beginning work in process consists of 7,000 units, 55% complete. 50,000 units were started and ending work in process is 5,000 units, 25% complete. Normal spoilage is equal to 10% of the units inspected. The inspection point occurs at the 20% point and 7,000 units were rejected. Direct materials are added at the 50% point, direct labour at 30% and overhead is applied uniformly. The costs per equivalent unit are: direct material $1.00; direct labour $1.50; overhead $2.00.
The cost of the ending work in process is:

• A) $2,500
• B) $2,850
• C) $2,700
• D) $4,000