Ogden Company uses the weighted-average method in its process costing system.Information for the month of January concerning Department A,the first stage of the company's production process,follows:
$$\begin{array} { | l | r | r | }
\hline & \text { Materials } & \text { Conversion cast } \
\hline \text { Work in process, beginning } & \$ 8,000 & \$ 6,000 \
\hline \begin{array} { l }
\text { Current added during } \
\text { January }
\end{array} & \$ 40,000 & \$ 32,000 \
\hline \begin{array} { l }
\text { Equivalent units of } \
\text { production }
\end{array} & 100,000 & 95,000 \
\hline \text { Cost per equivalent unit } & \$ 0.48 & \$ 0.40 \
\hline
\end{array}$$
$\begin{array}{|l|r|}
\hline \begin{array}{l}
\text { Units completed and transferred to the next } \
\text { department }
\end{array} & 90,000 \text { units } \
\hline \text { Work in process, ending } & 10,000 \text { units } \
\hline
\end{array}$

Materials are added at the beginning of the process.The ending work in process is 50% complete with respect to conversion costs.What cost would be recorded for the ending work-in-process inventory?
A) $6,800.
B) $8,800.
C) $3,400.
D) $4,400.

Question

Ogden Company uses the weighted-average method in its process costing system.Information for the month of January concerning Department A,the first stage of the company's production process,follows:
$$\begin{array} { | l | r | r | } 
\hline & \text { Materials } & \text { Conversion cast } \
\hline \text { Work in process, beginning } & \$ 8,000 & \$ 6,000 \
\hline \begin{array} { l } 
\text { Current added during } \
\text { January }
\end{array} & \$ 40,000 & \$ 32,000 \
\hline \begin{array} { l } 
\text { Equivalent units of } \
\text { production }
\end{array} & 100,000 & 95,000 \
\hline \text { Cost per equivalent unit } & \$ 0.48 & \$ 0.40 \
\hline
\end{array}$$
$\begin{array}{|l|r|}
\hline \begin{array}{l}
\text { Units completed and transferred to the next } \
\text { department }
\end{array} & 90,000 \text { units } \
\hline \text { Work in process, ending } & 10,000 \text { units } \
\hline
\end{array}$

Materials are added at the beginning of the process.The ending work in process is 50% complete with respect to conversion costs.What cost would be recorded for the ending work-in-process inventory?
A) $6,800.
B) $8,800.
C) $3,400.
D) $4,400.

Quizplus · Accepted Answer

The ending work in process is 50% complete with respect to conversion costs, so the equivalent units of production for conversion costs are 10,000 units (10,000 units x 50% = 5,000 equivalent units). The cost per equivalent unit for conversion costs is $0.40, so the cost of the ending work in process for conversion costs is $2,000 (5,000 equivalent units x $0.40 = $2,000).The ending work in process is 100% complete with respect to materials costs, so the equivalent units of production for materials costs are 10,000 units. The cost per equivalent unit for materials costs is $0.48, so the cost of the ending work in process for materials costs is $4,800 (10,000 equivalent units x $0.48 = $4,800).The total cost of the ending work in process is $6,800 ($2,000 + $4,800 = $6,800).

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