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Question - ?Samantha's Office Supplies manufactures desk organizers in its Processing Department. Direct materials are included at the inception of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Inspection takes place as units are placed into production. After? inspection, some units are spoiled due to undetectable material defects. Spoiled units generally constitute? 5% of the good units. Data provided for February 2017 are as? follows:
?WIP, beginning inventory? 2/1/2017
?52,000 units
Direct materials? (100% complete)
Conversion costs? (50% complete)
Started during February
?170,400 units
Completed and transferred out
?180,600 units
?WIP, ending inventory? 2/28/2017
?26,900 units
Conversion costs? (20% complete)
?Costs:
? WIP, beginning? inventory:
Direct materials
?$280,100
Conversion costs
?80,400
Direct materials added
?408,000
Conversion costs added
?264,400
Required - What costs are allocated to the ending work-in-process inventory for direct materials and conversion? costs, respectively, using the FIFO method of process? costing?
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