Abis Corporation uses the weighted-average method in its process-costing system.

Question

Abis Corporation uses the weighted-average method in its process-costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were

Cost Percent Complete
Material costs $6,000 50%
Conversion costs $9,900 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 costs were incurred in the first processing department during the month:

Cost
Material costs $113,900
Conversion costs $322,500

The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs.

Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that's 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. $73,829

b. $18,457

c. $92,286

d. $31,891

Explanation / Answer

Answer: D. $420,414. Physical unitsDirect materialsConversions costsTotal costsWIP, beginning8006,0009,90015,900Degree of completion 500% Completed and transferred out8,200 WIP, ending1,800 Degree of completion 80 % Total costs added 113,900322,500436,400 Flow of productionPhysical unitsDirect material equivalent unitsConversion costs equivalent unitsBeginning800 Started9,200 To account for10,000 Completed and transferred8,2008,2008,200WIP ending1,8001440360Accounted for10,000 Equi

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