Yiimron Corporation uses the weighted-average method in its process costing syst
ID: 2367217 • Letter: Y
Question
Yiimron Corporation uses the weighted-average method in its process costing system. Information for the month of March concerning Department A, the first stage of the company's production process:......................................................Materials...........Conversion Cost
Work in process, beginning........................$4,000............$3,000
Costs added during March........................$20,000............$16,000
Cost per equivalent unit...........................$0.24.............$0.20
Units completed and transferred to the
next department.................................90,000 units
Work in process, ending........................10,000 units
Materials are added at the beginning of the process. The ending work in process is 50% complete with respect to conversion costs. What cost would be recorded for the ending work in process inventory?
The answer is $3,400. I just need help on setting up the equation. Thanks in advance!
Explanation / Answer
Ending process inventory is 100% complete to materials, 10,000*100% = 10,000 equivalent units. Cost per equivalent unit is 0.24, so cost for direct materials in ending inventory is 10,000*0.24 = $2,400. Ending process inventory is 50% complete to conversion costs, 10,000*50% = 5,000 equivalent units. Cost per equivalent unit is 0.20, so conversion costs in ending inventory is 5,000*0.20 = $1,000. $2,400 + $1,000 = $3,400
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