A shampoo manufacturer offers the following information:

WIP Inventory, January 1 0 units
Units started 25,600 units
Units completed and transferred out 19,200 units
WIP Inventory, December 31 6,400 units
Direct materials $276,480
Direct labor $585,000
Manufacturing Overhead $328,920

The units in ending WIP Inventory were 60% complete for materials and 40% complete for conversion costs.

What is the total cost of units in ending WIP?
A) $345,600
B) $107,520
C) $153,600
D) $207,360

C
Explanation: C)
Material Conversion
Completed 19,200 19,200
End Inv. 6,400 × 60% 3,840 @40 2,560
Total units 23,040 21,760

Costs 276,480 913,920 (585,000 + 328,920)
Unit costs $12.00 $42.00
End inv./ units 3,840 2,560
$46,080 $107,520 = 153,600