Bettie Corporation uses a weighted-average process costing system to collect costs related to production. The following selected information relates to production for October: All materials at Bettie are added at the beginning of the production process.What total amount of cost should be assigned to the units in work in process on October 31?
A) $ 78,500
B) $ 80,400
C) $135,500
D) $138,000

Question

Bettie Corporation uses a weighted-average process costing system to collect costs related to production. The following selected information relates to production for October:  All materials at Bettie are added at the beginning of the production process.What total amount of cost should be assigned to the units in work in process on October 31?
A) $ 78,500 
B) $ 80,400 
C) $135,500 
D) $138,000

Quizplus · Accepted Answer

Total cost to be assigned = Cost of beginning WIP inventory + Cost added during the period. 
Cost of beginning WIP inventory can be calculated as follows: 
Cost per equivalent unit = Cost of beginning inventory ÷ Equivalent units of beginning inventory
Cost per equivalent unit = ($25,500 ÷ 1,500) = $17
Total cost of beginning WIP inventory = Cost per equivalent unit × Equivalent units in beginning inventory
Total cost of beginning WIP inventory = $17 × 500 = $8,500
 
Cost added during the period can be calculated as follows: 
Equivalent units of direct material = Units transferred out + Equivalent units in ending WIP inventory - Equivalent units in beginning WIP inventory
Equivalent units of direct material = (19,500 + 500) - 16,000 = 4,000
Equivalent units of conversion costs = Units transferred out + Equivalent units in ending WIP inventory - Equivalent units in beginning WIP inventory
Equivalent units of conversion costs = (19,500 + 500) - 16,000 = 4,000
 
Total cost added during the period = Cost of direct materials added + Cost of conversion costs added
Cost of direct materials added = Cost per equivalent unit of direct materials × Equivalent units of direct materials added
Cost of direct materials added = ($11 × 4,000) = $44,000
Cost of conversion costs added = Cost per equivalent unit of conversion costs × Equivalent units of conversion costs added
Cost of conversion costs added = ($12 × 4,000) = $48,000
 
Total cost to be assigned = Cost of beginning WIP inventory + Cost added during the period
Total cost to be assigned = $8,500 + $44,000 + $48,900
Total cost to be assigned = $80,400. 
Therefore, the correct answer is B.

Bettie Corporation Uses a Weighted-Average Process Costing System to Collect