Stefan Ceramics is in the business of selling ceramic vases. It has two departments molding and finishing. Molding department purchases tungsten carbide and produces ceramic vases out of it. Ceramic Vases are then transferred to finishing department, which designs it as per the requirement of the customers.

During the month of July, molding department purchased 500 kgs of tungsten carbide at $60 per kg. It started manufacture of 4,000 vases and completed and transferred 3,200 vases during the month. It has 800 vases in the process at the end of the month. It incurred direct labor charges of $1,000 and other manufacturing costs of $500, which included electricity costs of $200. Stefan had no inventory of tungsten carbide at the end of the month. It also had no beginning inventory of vases. The ending inventory was 50% complete in respect of conversion costs.

6. What is the total conversion costs for the month of July?

A) $1,700

B) $1,500

C) $1,300

D) $1,000

7. What is the cost of tungsten carbide that will be assigned to vases finished and transferred to the finishing department for the month of July?

A) $30,000

B) $28,000

C) $26,000

D) $24,000

8. What are the equivalent units used to calculate conversion costs transferred out and in ending inventory?

A) 4,000

B) 3,200

C) 3,600

D) 4,400

9. What is the total of the conversion costs that will be assigned to the ending WIP inventory?

A) $1,700

B) $1,333

C) $1,500

D) $166