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

question 45

Multiple Choice

Chen Corporation, a new company, adds material at the beginning of its production process; conversion cost, in contrast, is incurred evenly throughout manufacturing. 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 the company's ending work-in-process inventory is:

• A) $26,640.
• B) $44,400.
• C) $56,400.
• D) $74,000.
• E) None of the answers is correct.

---

Definitions:

Capital Contributions

The funds or assets contributed to a company by its owners or shareholders to increase equity.

Beginning Capital Balance

The total funds noted in a corporation's books at the beginning of a fiscal period.

Personal Use

The application or employment of something for the benefit or enjoyment of an individual, often distinct from business or commercial usage.

Income Distribution

The way in which a country's total GDP is spread among its population, affecting economic inequality.