Rathburn,Inc.is a service firm that uses process costing.The firm worked on a total of 1,000 cases this month,800 of which were completed during the period.The remaining cases were 40% complete.The firm incurred $180,000 in direct labor and manufacturing overhead costs during the period,and had $4,800 in direct labor and manufacturing costs in beginning inventory.Using the weighted average method,what was the total cost of cases still in process at the end of the period?
A)$16,800
B)$17,520
C)$168,000
D)$175,200

Question

Quizplus · Accepted Answer

The total cost includes beginning inventory and costs incurred during the period. The equivalent units for ending inventory are 200 cases * 40% = 80 equivalent units. The cost per equivalent unit is ($180,000 + $4,800) / (800 completed + 80 equivalent units) = $2,100 per unit. The cost of cases still in process is 80 units * $2,100 = $16,800.