Marion Company uses process costing and the weighted average method. The following information was available for April: During April, 1,000 units were started, and costs incurred during the month were $37,000. Ending inventory was 50% complete. Based on the information given, (A) above would equal what amount?
$$\begin{array} { | l | r | l | }
\hline & \text { Units } & \text { Costs } \
\hline \text { Work in Process, April 1 } & 100 & \$ 3,000 \
\hline \text { Work in Process, April 30 } & 200 & \text { (A) } \
\hline
\end{array}$$
A)$8,000
B)$3,000
C)$4,000
D)$3,300

Question

Marion Company uses process costing and the weighted average method. The following information was available for April: During April, 1,000 units were started, and costs incurred during the month were $37,000. Ending inventory was 50% complete. Based on the information given, (A) above would equal what amount?
$$\begin{array} { | l | r | l | } 
\hline & \text { Units } & \text { Costs } \
\hline \text { Work in Process, April 1 } & 100 & \$ 3,000 \
\hline \text { Work in Process, April 30 } & 200 & \text { (A) } \
\hline
\end{array}$$
A)$8,000
B)$3,000
C)$4,000
D)$3,300

Quizplus · Accepted Answer

The total cost to account for is $40,000 ($3,000 beginning WIP + $37,000 incurred). The equivalent units of production are 1,100 (1,000 started + 100 beginning inventory). The cost per equivalent unit is $40,000 / 1,100 = $36.36. The ending WIP is 200 units at 50% completion, so 100 equivalent units. The cost for ending WIP is 100 * $36.36 = $3,636, rounded to $4,000.

Marion Company Uses Process Costing and the Weighted Average Method