MC Qu. 98 Fulton Corporation uses the weighted-average …
Fulton Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were:
Cost | Percent Complete | |
Materials costs | $7,800 | 65% |
Conversion costs | $7,600 | 35% |
A total of 9,900 units were started and 8,900 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Materials costs | $128,600 |
Conversion costs | $220,800 |
The ending inventory was 70% complete with respect to materials and 60% 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:
A) $39,216
B) $65,360
C) $45,752
D) $41,633
Expert Answer
Cost of Prduction report (weighted avg method) | |||
ProductionDepartment | Equivalent Units | ||
Flow Of Units | Physical Units | Direct Material | Conversion Cost |
Units to be accounted for | |||
Beginning work in process inventory | 800 | ||
Units started this period | 9900 | ||
Total u nits to be accounted for | 10700 | ||
Units accounnted for: | |||
Completed and transferred out (b) | 8900 | 8900 | 8900 |
Ending work in progress inventory c (70% material and 60% conversion) | 1800 | 1260 | 1080 |
Total units to be accounted for (f) | 10700 | 10160 | 9980 |
Flow of Cost | |||
Cost in the begnning work in progress inventory | 15400 | 7800 | 7600 |
cost added to process | 349400 | 128600 | 220800 |
Total Cost to be accounted for (e) | 364800 | 136400 | 228400 |
Cost per equivalent unit (a) | 13.43 | 22.89 | |
Cost accounted for | |||
Cost assigned to units transferred out (a*b) | 323168 | 119484 | 203683 |
Cost in ending work in progress inventory (a*c) | 41632 | 16916 | 24717 |
Total Cost accounted for | 364800 | 136400 | 228400 |
Ans D Cost of Ending WIP is closest to $41633 | |||
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