Question

The following work-in-process inventory information is provided for a company: All direct materials are added at the beginning of the production process. Beginning inventory is 70% complete for conversion, and ending inventory is 40% complete for conversion. Units 8,000 Direct Materials Costs $11,000 $74,000 Conversion Costs $29,000 $161,000 Beginning work in process Cost added Ending work in process Units completed/transferred 12,000 33,000 What is the total production cost of the ending work in process using weighted average process costing?

Answer 1

$24129.6

Step-by-step explanation:

Calculation:

Equivalent units in ending work in process inventory for conversion = 33000+(12000*0.4) = 37800

Cost per equivalent unit (conversion) = 29000+161000/ (37800) = 5. 027

Total production cost of ending inventory = 24129.6

We calculate the equivalent units of production by adding the units transferred and completed, and the equivalent units in the ending inventory, so the equivalent units in ending work in process inventory for conversion becomes 37800.

Then we add the cost of beginning work-in-process for conversion and costs added during the production period for conversion and divide it by equivalent units in in ending work in process inventory for conversion.

After that, we get per unit cost which is then multiplied by the equivalent units in conversion to get total production costs.

Since, the all direct material costs are added in the beginning of the process, we don’t include in the other periods.