Delaney Products uses process costing. The following information is available for the current year: If Delaney has already calculated their cost per equivalent unit to be $18 per unit, what would be the cost of the ending work-in-process inventory assuming they use the weighted-average method?
A) $ 54,000
B) $ 36,000
C) $145,800
D) $180,000

Question

Delaney Products uses process costing. The following information is available for the current year:  If Delaney has already calculated their cost per equivalent unit to be $18 per unit, what would be the cost of the ending work-in-process inventory assuming they use the weighted-average method?
A) $ 54,000 
B) $ 36,000 
C) $145,800 
D) $180,000

Quizplus · Accepted Answer

Using the weighted-average method, we need to calculate the equivalent units of production for each cost element (materials and conversion) and for the total. 
Materials: (10,000 * 90%) + (2,000 * 20%) = 9,800 equivalent units 
Conversion: (10,000 * 75%) + (2,000 * 10%) = 7,900 equivalent units 
Total: (10,000 * 83%) + (2,000 * 15%) = 17,900 equivalent units

To calculate the cost of ending work-in-process inventory, we need to use the cost per equivalent unit of $18 and the equivalent units of production for each cost element in the ending work-in-process inventory: 
Materials: 200 units * $18 per unit = $3,600 
Conversion: 100 units * $18 per unit = $1,800 
Total: $3,600 + $1,800 = $5,400

Therefore, the cost of the ending work-in-process inventory is $36,000 (200 units x $18 per unit). The correct answer is B.

Delaney Products Uses Process Costing