Question

Togo Co. uses process costing to account for the production of picture frames. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Equivalent units have been calculated to be 12,000 units for materials and 10,000 units for conversion costs. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. Ending inventory still in process was 4,000 units (100% complete for materials, 50% for conversion). The value of ending inventory using the weighted average method would be closest to:

Answer 1

Answer:

value of ending inventory using W-A 46,266,67

Explanation:

under W-A we will calculate adding the beginning inventory and the cost added during the period:

material equivalent unit cost:

14,000 + 72,000 = 86,000

86,000 / 12,000 = 7,166666666666667

conversion equivalent unit cost

8,000 + 80,000 = 88,000

88,000/10,000 =8.8

ending WIP

materials:    4,000 x 7.1666 = 28,666.67

conversion:

4,000 units x 50% = 2,000

then             2,000 x 8.8      =  17, 600

              total WIP                  46,266,67