Brooks Corporation Has Two Sequential Processing Departments: Assembly Then Shaping

question 13

Multiple Choice

Brooks Corporation has two sequential processing departments: Assembly then Shaping.The Shaping Department reports the following information.Conversion costs are applied evenly throughout the process. $\begin{array}{|l|r|}\hline \text { Beginning WIP inventory } & 6,000 \text { units } \\\hline \text { Transferred-in costs in beginning WIP inventory } & \$ 108,000 \\\hline \text { Direct materials cost in beginning WIP inventory } & \$ 26,500 \\\hline \text { Conversion costs in beginning WIP inventory } & \$ 20,750 \\\hline \text { Units transferred-in } & 55,000 \text { units } \\\hline \text { Transferred-in costs } & \$ 530,000 \\\hline \text { Units completed } & \$ 0,000 \\\hline \text { Costs added: direct materials } & \$ 163,500 \\\hline \text { Costs added: conversion costs } & 11,000 \text { units } \\\hline \text { Ending WIP inventory } & \\\hline \begin{array}{l}\text { (50\% complete for materials and } 40 \% \text { complete for } \\\text { conversion) }\end{array} & \\\hline\end{array}$

- The total cost of units transferred to finished goods would be closest to:

• A)$ 397,320.
• B)$ 918,800.
• C)$ 920,271.
• D)$1,012,298.

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Definitions:

Goodwill

The intangible asset that arises when a company acquires another company for more than the fair value of its net identifiable assets.

Consolidated Balance Sheet

A financial statement showing the financial position of a company and its subsidiaries as one single entity.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal business cycle of a company.

Consolidated Balance Sheet

A comprehensive financial statement presenting the total assets, liabilities, and shareholder equity of a parent company and its subsidiaries as a single entity.