Selah Manufacturing Makes a Quality-Improvement Device for the Aeronautical Industry

question 87

Multiple Choice

Selah Manufacturing makes a quality-improvement device for the aeronautical industry. The company uses a process costing system and has only a single processing department. The following information pertains to operations for the month of May:
$\begin{array} { | l | r | } \hline & \text { Number of Units } \\\hline \text { Beginning work in process inventory } & 16,000 \\\hline \text { Units started into production during May } & 100,000 \\\hline \text { Units completed during May } & 92,000 \\\hline \text { Ending work in process inventory } & 24,000 \\\hline\end{array}$ The beginning work-in-process inventory was 60% complete with respect to materials and 20% complete with respect to conversion costs. The ending work-in-process inventory was 90% complete with respect to materials and 40% complete with respect to conversion costs. The costs were as follows:
$\begin{array} { |l | r | r | r | } \hline & \text { Materials } & \text { Conversion } & \text { Total } \\\hline \begin{array} { l } \text { Beginning work-in- } \\\text { process inventory }\end{array} & \$ 54,560 & \$ 35,560 & \$ 90,120 \\\hline \begin{array} { l } \text { Costs incurred } \\\text { during May }\end{array} & \$ 468,000 & \$ 574,040 & \$ 1,042,040 \\\hline \text { Total } & \$ 522,560 & \$ 609,600 & \$ 1,132,160 \\\hline\end{array}$
- Suppose there was no separate breakdown of the total cost of the beginning work-in-process inventory of $90,120 into materials ($54,560) and conversion ($35,560) .Which method of accounting would not have been possible to use?

• A) Process costing, using weighted-average.
• B) Process costing, using FIFO.
• C) Process costing using either weighted-average or FIFO.
• D) Operations costing.

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Definitions:

Abbreviation

A condensed version of a word or phrase, created to make writing and speaking more straightforward.

NPO

An instruction meaning "nil per os" or nothing by mouth, used to restrict oral intake of food and liquids, typically before surgery or certain medical tests.

Expiration Date

The date after which a product like food, medicine, or cosmetics is not recommended to be used.

Divisor

The number used to divide into another number.