Comprehensive Problem
The Rest-a-Lot chair company manufacturers a standard recliner. During February, the firm's Assembly Department started production of 75,000 chairs. During the month, the firm completed 80,000 chairs. The firm ended the month with 10,000 chairs in ending inventory. There were 15,000 chairs in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process.
The FIFO method of process costing is used by Rest-a-Lot. Beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs.
Beginning inventory costs:
Direct materials $24,000
Conversion costs $35,000
Manufacturing costs added during the accounting period:
Direct materials $168,000
Conversion costs $278,000
A. What is the cost to complete beginning inventory (WIP)? Round to two decimals.
B. What is the cost assigned to the units started AND finished during February? Round to two decimals.
C. What is the cost assigned to ending inventory (WIP). Please round to two decimals.