Question - Paisley Park Manufacturers, a new business, commenced operations on 1 July, 2016. During its first month of operations, it started and completed 40,000 units of Product Purple. It also had 10,000 units remaining in work in progress, 10% complete with respect to conversion costs as at 31 July, 2016. Note that 100% of direct materials are added at the beginning of the process and that conversion costs are added uniformly through time. During the month of July, the total manufacturing costs it had incurred for Product Purple are as follows:
- $200,000 in direct materials
- $90,000 in direct manufacturing labour
- $30,000 in indirect manufacturing labour; and
- $3,000 in other manufacturing overhead cost
Paisley Park Manufacturers uses the weighted average method of process costing. What is the value of closing work in progress on July 31?
a. 3,000
b. 323,000
c. 43,000
d. 64,600
e. None of the above