Bentley Enterprises Uses Process Costing to Control Costs in the Manufacture

question 20

Multiple Choice

Bentley Enterprises uses process costing to control costs in the manufacture of Dust Sensors for the mining industry.The following information pertains to operations for November.(CMA Exam adapted) The beginning inventory was 60% complete as to materials and 20% complete as to conversion costs.The ending inventory was 90% complete as to materials and 40% complete as to conversion costs.Costs pertaining to November are as follows:
$$\begin{array} { | l | r | } \hline & \text { Units } \\\hline \text { Work in process, Nowember 1st } & 16,000 \\\hline \text { Started in production during Nov ember } & 100,000 \\\hline \text { Work in process, Nowember } 30 ^ { \text {th } } & 24,000 \\\hline\end{array}$$
Beginning inventory: direct materials,$54,560;direct labor,$20,320;manufacturing overhead,$15,240.Costs incurred during the month: direct materials,$468,000;direct labor,$182,880;manufacturing overhead,$391,160.What is the equivalent unit cost for the conversion costs assuming Bentley uses first-in,first-out (FIFO) process costing?

• A) $5.65.
• B) $5.83.
• C) $6.00.
• D) $6.20.

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Definitions:

Absolute Threshold

The minimum intensity of a stimulus that one can perceive, marking the boundary between non-detection and detection of a stimulus.

Weber's Law

A principle in psychology that states the smallest change in a stimulus, such as weight or brightness, that can be detected is a constant proportion of the stimulus level.

Absolute Threshold

The minimum stimulus intensity required to detect a stimulus at least half the time.

Sensory Adaptation

The mechanism by which sensory receptors reduce their sensitivity to sustained stimuli as time progresses.