Kuzuck Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
A)$28,118
B)$15,981
C)$35,148
D)$5,272

Question

Kuzuck Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:  Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
A)$28,118 
B)$15,981 
C)$35,148 
D)$5,272

Quizplus · Accepted Answer

The total cost to account for in the first processing department is $97,720 ($37,440 beginning inventory + $60,280 total costs added during the month). The equivalent units for materials is 15,400 (14,800 fully completed units + 600 partially completed units), and the equivalent units for conversion is 14,920 (14,800 fully completed units + 120 partially completed units). Therefore, the cost per equivalent unit for materials is $3.10 ($47,740 ÷ 15,400) and the cost per equivalent unit for conversion is $3.88 ($57,980 ÷ 14,920). To calculate the cost of ending work in process inventory, we need to multiply the equivalent units for materials and conversion by their respective costs per equivalent unit and then add them together. For materials, the cost is $1,240 ($3.10 × 400). For conversion, the cost is $14,741.60 ($3.88 × 3,800). Adding these together, we get $15,981.60, which is closest to answer choice B.

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