Use the Following Information for the Next 2 Questions

question 33

Multiple Choice

Use the following information for the next 2 questions.
Assume there were 6,000 units in beginning work in process, 60% complete. 20,000 units were completed during the month. Ending work in process is 40% complete, which is equivalent to 3,200 units for conversion costs. Materials are added at the beginning of the process. The standard cost method is used.
-Assume the total conversion costs allocated to the completed units was $91,650. What amount of conversion costs are attached to the beginning work in process at the beginning of the month?

• A) $1,850
• B) $2,550
• C) $4,400 d None of the above

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Definitions:

Working Capital

A financial metric representing the difference between a company's current assets and current liabilities, indicating short-term liquidity.

Capital Budgeting

Capital budgeting is the process a business undertakes to evaluate potential major investments or expenditures to achieve long-term benefits.

Straight-Line Depreciation

A depreciation method where an asset's cost is evenly distributed over its expected lifespan.

Net Present Value

A financial metric used to evaluate the profitability of an investment, calculated by subtracting the present value of cash outflows from the present value of cash inflows over a period.