Question

Atwich Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of these units in beginning inventory were:

  Cost percent complete
Material Cost $10,700 70%

Conversion Cost $13,900 50%

A total of 5,100 units were started and 4,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
  Material cost $103,700

Conversion cost $ 180,900
The ending inventory was 75% complete with respect to materials and 10% 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 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:

1-      Total cost to account for using weighted average units

2-      Equivalent unit of production

3-      Cost of units completed and transferred out

4-      Cost per equivalent

Answer 1

Cost of production

	Physical units	Materials	Conversion
Units completed during period:
From beginning WIP	600
Units started and completed this period	5,100
Total units account for	5,700
Units transferred to next department	4,400	4,400	4,400
Units in Ending WIP	1,300
Direct materials (1,300×75%)		975
Conversion(1,300×10%)			130
Equivalent units of production	5,700	5,375	4,530

Cost

Flow of costs	Total	Direct Materials	conversion
Costs to be accounted for
Cost in beginning WIP	$24,600	$10,700	$13,900
Current period costs	$284,600	$103,700	$180,900
Total costs accounted for	$309,200	$114,400	$194,800
Cost per equivalent unit
Direct materials($114,400÷5,375)		$21.284
Conversion($194,800÷4,530)			$43.002

	EUP	Cost per unit	Total costs
Cost of units transferred out
Direct materials	4,400	$21.284	$93,650
Conversion	4,400	$43.002	$189,208
Total costs transferred out			$282,858
Cost of Ending WIP
Direct materials	975	$21.284	$20,752
Conversion	130	$43.002	$5,590
Cost of Ending WIP			$26,342
Total costs accounted for			$309,200

____×____

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