Answer the following questions using the information below:
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 2012 are as follows:
Costs for December:

-What are the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method?

Question

Answer the following questions using the information below:
Craft Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 2012 are as follows:
  Costs for December:
 
-What are the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method?

Quizplus · Accepted Answer

To calculate the direct materials and conversion costs assigned to ending work in process, we use the weighted-average process-costing method.

Direct materials:
Units started during December = Units completed and transferred out + Units in ending work in process = 37,000 + 4,000 = 41,000 
Direct materials added during December = $111,800 
Cost per equivalent unit = Direct materials added during December ÷ Units started during December = $111,800 ÷ 41,000 = $2.73 
Direct materials assigned to ending work in process = Units in ending work in process × Cost per equivalent unit = 4,000 × $2.73 = $10,920

Conversion costs:
Units started during December = Units completed and transferred out + Units in ending work in process = 37,000 + 4,000 = 41,000 
Conversion costs added during December = $227,200 
Cost per equivalent unit = Conversion costs added during December ÷ Units started during December = $227,200 ÷ 41,000 = $5.54 
Conversion costs assigned to ending work in process = Units in ending work in process × Cost per equivalent unit = 4,000 × $5.54 = $22,160

Therefore, the amounts of direct materials and conversion costs assigned to ending work in process using the weighted-average process-costing method are $10,920 and $22,160, respectively. 
Thus, the best choice is C.

Answer the Following Questions Using the Information Below