At John & Mary Corp., 1,000 units were in beginning Work-in-Progress (WIP)-Grinding this period, and their status was 100% complete for Direct Materials (DM) and 30% complete for Conversion Costs (CC). A total of 4,000 more units were started and 4,500 total units were completed and transferred to WIP-Fermenting, leaving 500 units in ending inventory. The status of ending inventory was 100% complete for DM and 20% complete for CC. The company has reported the equivalent costs per unit for DM and CC as $0.50 and $0.70 respectively. Determine the total cost of units in ending WIP Inventory following the Weighted-Average method of costing.

Question

Quizplus · Accepted Answer

Equivalent Units in Ending WIP Inventory:
For Direct Materials, 500 units × 100% = 500 units
For Conversion Costs, 500 units × 20% = 100 units
Therefore, Direct Materials Cost of Units in Ending WIP Inventory = 500 units × 0.50 = $250; and
Conversion Costs of Units in Ending WIP Inventory = 100 units × 0.70 = $70
Total Cost of Units in Ending WIP Inventory is $250 + $70 = $320