Macey Company uses a weighted-average process costing system. Beginning inventory consists of 6,000 units, 40% complete. Units started are 14,000, completed are 10,000, and ending inventories are 9,000 units, 70% complete. Normal spoilage is 5% of the units inspected. Direct material is added at the 75% point and spoilage inspection occurs at the 80% point. The cost per equivalent unit for materials was $1.00 and $3.00 for conversion costs.
The cost of the ending work in process was:
A) $30,600
B) $18,900
C) $28,800
D) $36,000

Question

Quizplus · Accepted Answer

The ending work in process consists of 9,000 units that are 70% complete. For conversion costs, the equivalent units are 9,000 * 70% = 6,300. For materials, since they are added at the 75% point and the units are 70% complete, no materials are added to the ending inventory. Therefore, the cost is 6,300 * $3.00 (conversion cost) = $18,900.

Macey Company Uses a Weighted-Average Process Costing System