Question

The Gasson Company uses the weighted-average method in its process costing system.

The company's ending work in process inventory consists of 10,000 units, 100% complete with respect to materials and 70% complete with respect to labor and overhead.

Required:

If the costs per equivalent unit are $4.50 for the materials and $2.00 for labor and overhead, the balance of the ending work in process inventory account would be:

A. $44,500
B. $50,500
C. $59,000
D. $65,000

Answer 1

Answer:

Option (C) is correct.

Explanation:

Given that,

Ending work in process inventory consists = 10,000 units

100% complete with respect to materials

70% complete with respect to labor and overhead

costs per equivalent unit for material = $4.50

costs per equivalent unit for labor and overhead = $2.00

Balance of Ending WIP:

= Direct Material + Labor and Overhead

= (10,000 × $4.50) + (10,000 × 70% × $2.00)

= $45,000 + $14,000

= $59,000