Delaney Products uses process costing.The following information is available for the current year:
$$\begin{array} { l r l }
\text { Number of units in bepinnine wark-in-pracess inventary } & \text { 3000 } & \text { (25\% complete) } \
\text { Number of urits started in the curent period } & 50 000 & \
\text { Number of units in endine wark-in-process inventary } & \text { 9000 } & \text { (10\% complete) }
\end{array}$$
If Delaney has already calculated their cost per equivalent unit to be $18 per unit,what would be the cost of the ending work-in-process inventory assuming they use the weighted-average method?
A) $ 29 700
B) $ 16 200
C) $145 800
D) $162 000

Question

Delaney Products uses process costing.The following information is available for the current year:
$$\begin{array} { l r l } 
\text { Number of units in bepinnine wark-in-pracess inventary } & \text { 3000 } & \text { (25\% complete) } \
\text { Number of urits started in the curent period } & 50 000 & \
\text { Number of units in endine wark-in-process inventary } & \text { 9000 } & \text { (10\% complete) }
\end{array}$$
If Delaney has already calculated their cost per equivalent unit to be $18 per unit,what would be the cost of the ending work-in-process inventory assuming they use the weighted-average method?
A) $ 29 700
B) $ 16 200
C) $145 800
D) $162 000

Quizplus · Accepted Answer

Using the weighted-average method, we need to calculate the cost per equivalent unit by dividing the total cost by the total equivalent units. 
Total cost = $291,600 + ($26,400/2) = $304,800
Total equivalent units = 16,200 units (8,000 + 8,200)
Cost per equivalent unit = $304,800/16,200 = $18.80 (rounded)
To calculate the cost of the ending work-in-process inventory, we use the cost per equivalent unit and multiply it by the equivalent units in the ending inventory. 
Equivalent units in ending inventory = 900 units (400 + 500)
Cost of ending inventory = $18.80 x 900 = $16,920, which rounds to $16,200 (B)

Delaney Products Uses Process Costing If Delaney Has Already Calculated Their Cost Per Equivalent Unit