Parnelli Tires Uses a Process Costing System and Has 1,600

question 111

Multiple Choice

Parnelli Tires uses a process costing system and has 1,600 tires remaining in its Belting Department's Work in Process inventory at month end.These tires are 90% and 40% complete with regard to materials and conversion costs, respectively.There were 6,500 tires completed and transferred out during the period.Conversion costs during the beginning of the month were $69,300 and added during the period were $116,340.How much is the conversion cost of the ending Work in Process?

• A)$7,140
• B)$16,640
• C)$36,700
• D)$24,960

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Definitions:

Contingencies

Conditional liabilities or assets that may arise due to future events, whose effects cannot be determined with certainty at the present time.

Balance Sheet

A financial statement that provides a snapshot of a company's financial condition at a specific time, showing assets, liabilities, and equity.

Lawsuit Loss

Financial damages that a company is required to pay as the result of legal judgment or settlement of a lawsuit.

Probable Loss

An estimated loss from a contingent liability that is likely to occur and can be reasonably estimated.