Lucas Company uses the weighted-average method in its process costing system.The company adds materials at the beginning of the process in the Forming Department,which is the first of two stages in its production process.Information concerning operations in the Forming Department in October follows:
$\begin{array}{|c|c|c|}
\hline&\text { Materials }\
\hline&\text {Units}&\text {Cost}\
\hline \begin{array}{l}
\text { Work in process on October } \
1\
\end{array}& 6,000 & \$ 3,000 \
\hline \text { Units started during October } & 50,000 & \$ 25,560 \
\hline \begin{array}{l}
\text { Units completed and } \
\text { transferred to the next } \
\text { Department during October }
\end{array} & 44,000 & \
\hline
\end{array}$

What was the materials cost of work in process on October 31?
A) $3,060.
B) $5,520.
C) $6,000.
D) $6,120.

Question

Lucas Company uses the weighted-average method in its process costing system.The company adds materials at the beginning of the process in the Forming Department,which is the first of two stages in its production process.Information concerning operations in the Forming Department in October follows:
$\begin{array}{|c|c|c|}
\hline&\text { Materials }\
\hline&\text {Units}&\text {Cost}\
\hline  \begin{array}{l}
\text { Work in process on October } \
1\
\end{array}& 6,000 & \$ 3,000 \
\hline \text { Units started during October } & 50,000 & \$ 25,560 \
\hline \begin{array}{l}
\text { Units completed and } \
\text { transferred to the next } \
\text { Department during October }
\end{array} & 44,000 & \
\hline
\end{array}$

What was the materials cost of work in process on October 31?
A) $3,060.
B) $5,520.
C) $6,000.
D) $6,120.

Quizplus · Accepted Answer

To calculate the materials cost of work in process on October 31, we need to add the cost of materials added in October to the cost of materials already in process at the beginning of October and subtract the cost of materials used during the month.

Materials cost in process on October 1: 
40,000 x $0.20 = $8,000

Materials added in October: 
12,000 x $0.30 = $3,600

Total materials available for use: 
$8,000 + $3,600 = $11,600

Materials used in October: 
35,000 x $0.20 = $7,000

Materials cost of work in process on October 31: 
$11,600 - $7,000 = $4,600

However, we are told in the question that there is an ending work in process inventory of 1,200 units that is 60% complete with respect to materials. This means we have to calculate the cost of materials in these units separately:

Materials cost in ending inventory: 
1,200 x 60% x $0.20 = $144

Therefore, the total materials cost of work in process on October 31 is: 
$4,600 + $144 = $6,120

Hence, the correct answer is option D.

Lucas Company Uses the Weighted-Average Method in Its Process Costing