Question

1. Shiffon Electronics manufactures music player. Its costing system uses two cost categories, direct materials and conversion costs. Each product must pass through the Assembly Department, the Programming department, and the Testing Department. Direct materials are added at the beginning of the production process. Conversion costs are allocated evenly throughout production. Shiffon Electronics uses weighted-average costing.

The following information is available for the month of March 2017 for the Assembly department.

Work in process, beginning inventory               340 units     

      Conversion costs (25% complete)

Units started during March                                860 units

Work in process, ending inventory:                   140 units

      Conversion costs (60% complete)

The cost details for the month of March are as follows:

Work in process, beginning inventory:

      Direct materials                                           $349,000

      Conversion costs                                         $360,000

Direct materials costs added during March      $703,500

Conversion costs added during March           $1,130,000

What amount of conversion costs is assigned to the ending Work-in-Process account for March?

(Round intermediary dollar amounts to the nearest cent and unit amounts to the nearest whole unit.) ?

	A.	$270,629
	B.	$182,343
	C.	$122,792
	D.	$109,406

Answer 1

Correct answer------------(D) $109,406

Working

Reconciliation of Units
A	Beginning WIP	340
B	Introduced	860
C=A+B	TOTAL	1,200
D	Transferred out	1,060
E=C-D	Ending WIP	140

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	1,060			100%	1,060	100%	1,060
Ending WIP	140			100%	140	60%	84
Total	1,200			Total	1,200	Total	1,144

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost (A)		$ 349,000	$ 360,000	$ 709,000
Cost incurred during period (B)		$ 703,500	$ 1,130,000	$ 1,833,500
Total Cost to be accounted for (C=A+B)		$ 1,052,500	$ 1,490,000	$ 2,542,500
Total Equivalent Units(D)		1,200	1,144
Cost per Equivalent Units (E=C/D)		$               877.08	$             1,302.45	$               2,179.53

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP
		Units	Cost Allocated
Material	$ 877.08	140	$        122,791.67
Conversion	$ 1,302.45	84	$        109,405.59
TOTAL	$ 2,542,500	TOTAL	$ 232,197