Question

Haffner Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:

Beginning work in process inventory:
Units in beginning work in process inventory		2,000
Materials costs	$	9,300
Conversion costs	$	10,600
Percent complete with respect to materials		85	%
Percent complete with respect to conversion		55	%
Units started into production during the month		8,500
Units transferred to the next department during the month		7,600
Materials costs added during the month	$	104,200
Conversion costs added during the month	$	185,900
Ending work in process inventory:
Units in ending work in process inventory		2,900
Percent complete with respect to materials		60	%
Percent complete with respect to conversion		50	%

The cost of ending work in process inventory in the first processing department according to the company’s cost system is closest to:

Answer 1

• All working forms part of the answer
• Workings:

Step 1

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	7,600	100%	7,600	100%	7,600
Units of ENDING WIP	2,900	60%	1,740	50%	1,450
Equivalent Units of Production			9,340		9,050

Step 2

COST per EUP			Material		Conversion
Cost of Beginning WIP			$             9,300.00		$                                  10,600.00
Cost incurred during the period			$        104,200.00		$                                185,900.00
Total Costs		Costs	$        113,500.00	Costs	$                                196,500.00
Equivalent units of production		EUP	9,340	EUP	9,050
Cost per EUP			$            12.15		$                                   21.71

• Note: Cost per EUP is rounded off to 2 decimal places.
• Answer: Cost of Ending Inventory

Cost of ending WIP	EUP	Cost per EUP	Total Cost
- Direct Materials	1,740	$            12.15	$          21,141.00
- Conversion	1,450	$            21.71	$          31,479.50
Total cost of ending WIP				$              52,620.50