6- Abis corporation uses the weighted - average method in its process coasting s

ID: 2337403 • Letter: 6

Question

6- Abis corporation uses the weighted - average method in its process coasting system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in the beginning inventory were Cost $6,000 $9,900 percent complete Material cost 50% Conversion costs 30% A total of $ 9.200 units were started and 8,200 units were transferred to the second processing department during the month. The following were incurred in the first processing department during the month: Material costs: $113,900 Conversion costs: $322,500 The ending inventory was 80% complete with respect to conversion costs Note: your answers may differ from those offered bellow due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry The total cost transferred from the first processing department to the next processing department during the month is closest t: out all computations to at least three decimal places. A- 512,700 B- 452,300 C- 420,414 D- 436,400

Explanation / Answer

(6) Equivalent Units & Cost per unit calculation :-

Material

Conversion Cost

Beginning Inventory (WIP)

800

Units started & Completed

7400

Ending Inventory (WIP)

(1800 * 80%)

=1440

(1800 * 20%)

=360

Equivalent Units (B)

9640

8560

Total Cost incurred (A)

(113900 + 6000)

=119900

(322500 + 9900)

=332400

Cost per EUP (A/B)

12.44

38.83

Cost transferred :-

Mateial = 12.44 * 8200 = 102008

Conversion = 38.83 * 8200 = 318406

Total = 102008 + 318406 = 420414

Option C is correct

(7) Ending WIP :-

Material = 119900 – 102008 = 17892

Conversion = 332400 – 318406 = 13994

Total = 17892 + 13994 = 31886

Option D is correct