Chen Corporation, a New Company, Adds Material at the Beginning

question 27

Multiple Choice

Chen Corporation, a new company, adds material at the beginning of its production process; conversion costs, in contrast, are incurred evenly throughout the manufacturing process. During May, the firm completed 15,000 units and had ending work in process of 2,000 units, 60% complete. Equivalent-unit costs were: materials, $15; conversion, $22. The cost of Chen's completed production is:

• A)$225,000.
• B)$330,000.
• C)$333,000.
• D)$555,000.
• E)$629,000.

---

Definitions:

Traceable Fixed Expense

Fixed costs that can be directly linked to a specific business department or segment, aiding in performance evaluation.

Net Operating Income

The total profit of a company after operating expenses are subtracted, but before taxes and interest expenses are deducted.

Price Hike

An increase in the price of goods or services, often due to factors like inflation, demand, or rising costs.

Traceable Fixed Expense

A fixed cost that can be directly associated with a specific business segment or department.