Reference: 04-03
Madsen Company uses the weighted-average method in its process costing system. During October, the Mixing Department transferred out 40,000 units. The October 31 work in process inventory in the Mixing Department consisted of 4,000 equivalent units of material and 5,000 equivalent units of labour and overhead. The cost per equivalent unit was $2.50 for materials and $6.25 for labour and overhead.
-The total cost of the October 31 work in process inventory was?
A)$35,000.
B)$43,750.
C)$78,750.
D)$41,250.

Question

Quizplus · Accepted Answer

Total cost of materials = 4,000 equivalent units x $2.50 per equivalent unit = $10,000
Total cost of labour and overhead = 5,000 equivalent units x $6.25 per equivalent unit = $31,250
Total cost of work in process inventory = $10,000 + $31,250 = $41,250. Therefore, the answer is D.

Reference: 04-03 Madsen Company Uses the Weighted-Average Method in Its Process Costing