Reference no: EM133004777

Under the? Stars, Inc. manufactures sleeping bags in two sequential production? departments: machining and packaging. Two direct? materials, fabric and? insulation, are used in the machining department. The fabric is added at the beginning of the production process and accounts for? 30% of the direct material input. The insulation is added when the conversion process is? 50% complete. Conversion costs are incurred uniformly throughout production in the machining department.

The machining department began July with 250 sleeping bags in process and started another 525 sleeping bags during the month. At month? end, 255 sleeping bags remained in process in the department and were assigned a cost of? $12,444 on the? department's July production cost? report, $3,570 of which was for direct material costs. Management estimates that the units in ending inventory are?60% complete with respect to conversion costs.

Problem 1: Given the above? information, which of the following statements is incorrect with regard to the machining? department's July?operations?

A. Physical units in ending inventory each receive? $34.80 of conversion costs at month end.
B. Machining worked on 775 physical units during July.
C. The cost to complete a bag in the machining department during July equals ?$72.
D. The costs transferred to the packaging department during July equal ?$37,440.
E. The total costs to account for in machining during July equals?$55,800.