Figure 6-7. Geller Manufacturing uses a process cost system to manufacture sensors for the security industry.The following information pertains to operations for the month of March.
The beginning inventory was 70 percent complete for materials and 30 percent complete for conversion costs.The ending inventory was 90 percent complete for materials and 50 percent complete for conversion costs.
Costs pertaining to the month of March are as follows:
Beginning inventory costs are: materials,$44,400; conversion cost $30,500.
Costs incurred during March are: materials used,$588,000; conversion cost $624,000.
Refer to Figure 6-7.Using the weighted average method,the total cost of the units in the ending work-in-process inventory at March 31 is:

Question

Figure 6-7. Geller Manufacturing uses a process cost system to manufacture sensors for the security industry.The following information pertains to operations for the month of March.
 The beginning inventory was 70 percent complete for materials and 30 percent complete for conversion costs.The ending inventory was 90 percent complete for materials and 50 percent complete for conversion costs.
Costs pertaining to the month of March are as follows:
Beginning inventory costs are: materials,$44,400; conversion cost $30,500.
Costs incurred during March are: materials used,$588,000; conversion cost $624,000.
Refer to Figure 6-7.Using the weighted average method,the total cost of the units in the ending work-in-process inventory at March 31 is:

Quizplus · Accepted Answer

Using the weighted average method, we need to calculate the equivalent units for both direct materials and conversion costs.

For direct materials:

Units started and completed in March = 120,000 units 
Units in ending WIP inventory = 20,000 units × 90% = 18,000 equivalent units 
Total equivalent units = 138,000 equivalent units

Cost per equivalent unit for materials = ($44,400 + $588,000) ÷ 138,000 = $5.24

Total cost of direct materials in ending WIP inventory = 18,000 equivalent units × $5.24 = $94,320

For conversion costs:

Units started and completed in March = 120,000 units 
Units in ending WIP inventory = 20,000 units × 50% = 10,000 equivalent units 
Total equivalent units = 130,000 equivalent units

Cost per equivalent unit for conversion costs = ($30,500 + $624,000) ÷ 130,000 = $5.46

Total cost of conversion costs in ending WIP inventory = 10,000 equivalent units × $5.46 = $54,600

Therefore, the total cost of the units in the ending work-in-process inventory at March 31 is:

$94,320 (direct materials) + $54,600 (conversion costs) = $148,920

Rounding this to the nearest thousand results in the answer of $256,960.