Department A had no Work-in-Process at the beginning of the period,1,000 units were completed during the period,200 units were 50% completed at the end of the period,and the following manufacturing costs were debited to the departmental Work-in-Process account during the period:
$$\begin{array} { | l | r | }
\hline \text { Direct materials } ( 1,200 \text { at } \$ 10 ) & \$ 12,000 \
\hline \text { Direct labor } & 5,500 \
\hline \text { Factory overhead } & 4,400 \
\hline
\end{array}$$
Assuming that all direct materials are added at the beginning of production and Department A uses weighted-average process costing,what is the total cost of the departmental Work-in-Process Inventory at the end of the period?

Question

Department A had no Work-in-Process at the beginning of the period,1,000 units were completed during the period,200 units were 50% completed at the end of the period,and the following manufacturing costs were debited to the departmental Work-in-Process account during the period: 
$$\begin{array} { | l | r | } 
\hline \text { Direct materials } ( 1,200 \text { at } \$ 10 ) & \$ 12,000 \
\hline \text { Direct labor } & 5,500 \
\hline \text { Factory overhead } & 4,400 \
\hline
\end{array}$$
Assuming that all direct materials are added at the beginning of production and Department A uses weighted-average process costing,what is the total cost of the departmental Work-in-Process Inventory at the end of the period?

Quizplus · Accepted Answer

Using weighted-average process costing, we first need to calculate the equivalent units of production.  
Equivalent units of production = units completed + (units in ending Work-in-Process inventory x percentage of completion)  
Equivalent units of production = 1,000 + (200 x 0.5) = 1,100  
Total cost of departmental Work-in-Process Inventory = cost per equivalent unit x equivalent units of production  
Cost per equivalent unit = (direct materials + direct labor + factory overhead) ÷ equivalent units of production  
Cost per equivalent unit = ($12,000 + $5,500 + $4,400) ÷ 1,100 = $21.82  
Total cost of departmental Work-in-Process Inventory = $21.82 x 200 = $4,364  
However, since Department A had no Work-in-Process at the beginning of the period, this $4,364 only partially pertains to the ending inventory.  
Ending Work-in-Process Inventory = 200 units x 50% complete = 100 equivalent units of production  
Cost of ending Work-in-Process Inventory = $21.82 x 100 = $2,182  
Therefore, the total cost of the departmental Work-in-Process Inventory at the end of the period is $2,182. Choice B is the correct answer.

Department a Had No Work-In-Process at the Beginning of the Period,1,000