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Miramar, Inc. uses a weighted-average process costing system which recognizes normal spoilage as 5% of good output. During the current period, 14,000 units were started and 10,000 units completed. Materials are added at the beginning of the process, conversion costs occur uniformly, and the inspection point is at the 70% point. Beginning work in process was 6,000 units, 40% complete, and ending work in process 9,000 units, 80% complete. The cost per equivalent unit for material was $1.00 and for conversion costs $3.00.
-The cost of ending work in process was
A) $31,995
B) $30,600
C) $31,334
D) $31,547

Question

Quizplus · Accepted Answer

The cost of ending work in process is $31,995.The equivalent units of production are:Beginning work in process: 6,000 units x 40% = 2,400 unitsUnits started and completed: 10,000 unitsEnding work in process: 9,000 units x 80% = 7,200 unitsTotal equivalent units of production: 2,400 units + 10,000 units + 7,200 units = 19,600 unitsThe cost per equivalent unit is:Materials: $1.00 per unitConversion costs: $3.00 per unitThe cost of ending work in process is:Materials: 7,200 units x $1.00 per unit = $7,200Conversion costs: 7,200 units x $3.00 per unit = $21,600Total cost of ending work in process: $7,200 + $21,600 = $28,800Add the cost of the beginning work in process:$28,800 + $3,195 = $31,995

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