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Alexxandr [17]
3 years ago
8

Hache Corporation uses the weighted-average method in its process costing system. Data concerning the first processing departmen

t for the most recent month are listed below:
Beginning work in process inventory:
Units in beginning work in process inventory 1,050
Materials Costs $ 8,700
Conversion Costs $ 8,500
Percent complete with respect to materials 50%
Percent complete with respect to conversion 30%
Units started into production during the month 6,600
Units transferred to the next department during the month 5,800
Materials costs added during the month $ 91,000
Conversion costs added during the month $ 126,300
Ending work in process inventory:
Units in ending work in process inventory 1,850
Percent complete with respect to materials 50%
Percent complete with respect to conversion 20%
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is 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: (Do not round Cost per equivalent unit.)
a) $67,845
b) $38,507
c) $17,478
d) $21,797
Business
1 answer:
Greeley [361]3 years ago
5 0

Answer:

The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to: d) $21,797

Explanation:

Calculation of Equivalent Units of Production

<u>Materials </u>

Units transferred to the next department (5,800 × 100%) = 5,800

Units in ending Work In process (1,850 × 50%)                  =    925

Total Equivalent Units of Production for Materials             = 6,725

<u>Conversion</u>

Units transferred to the next department (5,800 × 100%)    = 5,800

Units in ending Work In process (1,850 × 20%)                     =    370

Total Equivalent Units of Production for Conversion Costs =  6,170

Calculation of Cost per Equivalent units of Production

Materials

Cost per equivalent unit = Total Material Cost ÷ Total Equivalent Units of Production for Materials

                                        = ($ 8,700 + $ 91,000) ÷ 6,725

                                        = $14.825

Cost per equivalent unit = Total Material Cost ÷ Total Equivalent Units of Production for Materials

                                        = ($ 8,500 + $ 126,300) ÷ 6,170

                                        = $21.848

Calculation of cost of ending work in process inventory

Materials ( 925 ×  $14.825)             =  $13,713.12

Conversion Cost ( 370 × $21.848)  =  $8,083.76

Total                                                 =  $21,796.88

Thus,

The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to: d) $21,797.

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