Answer the following questions using the information below:
The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Townsend Tractor uses weighted-average costing.

-What is the total amount credited to the Work-in-Process account during the month of April?

Question

Answer the following questions using the information below:
The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly line. Its costing system uses two cost categories, direct materials and conversion costs. Each tractor must pass through the Assembly Department and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Townsend Tractor uses weighted-average costing.
 
-What is the total amount credited to the Work-in-Process account during the month of April?

Quizplus · Accepted Answer

To calculate the total amount credited to the Work-in-Process account during the month of April, we need to use the weighted-average method.

Total Cost of Beginning Work-in-Process Inventory = $750,000
Direct Materials Cost Added in April = $600,000
Conversion Costs Incurred in April = $1,500,000
Total Cost to Account For = $2,850,000
Units Started and Completed in April = 1,500 units
Units in Ending Work-in-Process Inventory = 300 units (60% complete for conversion costs)

Using the weighted-average method, we can calculate the total cost per equivalent unit:
Total Cost to Account For / Total Equivalent Units = $2,850,000 / 3,600 units = $791.67 per equivalent unit

Now, we can calculate the total amount credited to the Work-in-Process account:
Cost of Beginning Work-in-Process Inventory + Direct Materials Cost Added in April + Conversion Costs Incurred in April - Cost of Ending Work-in-Process Inventory
= $750,000 + $600,000 + ($791.67 x 1,500) - ($791.67 x 300 x 60%) 
= $1,999,687.50

Therefore, the answer is C: $1,999,687.50.

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