Kimberly Manufacturing uses a process-costing system to manufacture Dust Density Sensors for the mining industry. The following information pertains to operations for the month of May, Year 5.
Units
Beginning work-in-process inventory, May 1.........16,000
Started in production during May.....................100,000
Completed production during May.....................92,000
Ending work-in-process inventory, May 31...........24,000
The beginning inventory was 60% complete for materials and 20% complete for conversion costs. The ending inventory was 90% complete for materials and 40% complete for conversion costs.
Costs pertaining to the month of May are as follows.
• Beginning inventory costs are: materials, $54,560; direct labor $20,320; and factory overhead, $15,240.
• Costs incurred during May are: materials used, $468,000; direct labor, $182,880; and factory overhead, $391,160.
Using the weighted-average method, the equivalent-unit conversion cost for May is:
1. $5.65
2. $5.83
3. $6.00
4. $6.41