LuLu, Inc Manufactures a Product That Passes Through Two Processes: Mixing

question 103

Multiple Choice

LuLu, Inc. manufactures a product that passes through two processes: mixing and moulding. All manufacturing costs are added uniformly in the mixing department.
Information for the mixing department for May follows:
During May, 25,000 units were completed and transferred to the moulding department. The following costs were incurred by the mixing department during May:
Work in process, May 1:
$\begin{array}{lr}\text { Units (35\% complete) } & 5,000 \\\text { Direct materials } & \$ 24,000 \\\text { Direct labour } & \$ 30,000 \\\text { Overhead } & \$ 10,000\end{array}$ By May 31, 2,500 units that were 80% complete remained in the mixing department. LuLu uses the weighted average method. $\begin{array}{lr}\text { Direct materials } & \$ 90,000 \\\text { Direct labour } & 120,000 \\\text { Overhead } & 30,000\end{array}$
-Refer to the Figure.What would be LuLu's cost of May's ending work in process for the mixing department?

• A)$17,500
• B)$19,200
• C)$21,400
• D)$22,520

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Definitions:

Mediation

A neutral party tries to help conflicting parties improve communication to resolve their dispute.

Neutral Third Party

An unbiased individual or entity not directly involved in a situation who may help mediate or arbitrate disputes.

Distributive Negotiations

A negotiation process focusing on dividing limited resources or reaching an agreement where one party's gain is the other party's loss.

Arbitration

A method of dispute resolution where an impartial third party makes a binding decision.