Lucas Corporation uses the weighted-average method in its process costing system.The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process.Information concerning operations in the Forming Department in October follows: What was the materials cost of work in process at October 31?

Question

Lucas Corporation uses the weighted-average method in its process costing system.The company adds materials at the beginning of the process in the Forming Department, which is the first of two stages in its production process.Information concerning operations in the Forming Department in October follows:  What was the materials cost of work in process at October 31?

Quizplus · Accepted Answer

Weighted-average method
Units in beginning work in process inventory + Units started into production or transferred in = Units in ending work in process inventory + Units completed and transferred out
Units in ending work in process inventory = Units in beginning work in process inventory + Units started into production or transferred in - Units completed and transferred out = 6,000 + 50,000 - 44,000 = 12,000
Equivalent units of production = Units transferred to the next department or to finished goods + Equivalent units in ending work in process inventory = 44,000 + 12,000 = 56,000
Cost per equivalent unit = (Cost of beginning work in process inventory + Cost added during the period)÷ Equivalent units of production = ($3,000 + $25,560)÷ 56,000 equivalent units = $0.51 per equivalent unit
Material cost in ending inventory = 12,000 equivalent units × $0.51 per equivalent unit = $6,120

Lucas Corporation Uses the Weighted-Average Method in Its Process Costing