Scheney Company uses the weighted-average method in its process costing system. The company's work in process stock on March 31 consisted of 20,000 units. The units in the ending work in process stock were 100% complete with respect to materials and 70% complete with respect to labour and overhead. If the cost per equivalent unit for August was £2.50 for materials and £4.75 for labour and overhead, the total cost in the March 31 work in process stock was:

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Quizplus · Accepted Answer

The total cost in the March 31 work in process stock is calculated by adding the cost of materials (which is 100% complete for all units) and the cost of labor and overhead (which is 70% complete for all units). For materials, the cost is 20,000 units * £2.50 = £50,000. For labor and overhead, the cost is 20,000 units * 70% * £4.75 = £66,500. Adding these together gives £50,000 + £66,500 = £116,500.

Scheney Company Uses the Weighted-Average Method in Its Process Costing