Haffner Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
A) $37,278
B) $33,294
C) $62,129
D) $31,065

Question

Haffner Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:  The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:
A) $37,278 
B) $33,294 
C) $62,129 
D) $31,065

Quizplus · Accepted Answer

Using the weighted-average method, the cost per equivalent unit is calculated by adding the total costs incurred in the department during the period and dividing by the equivalent units of production. 
Total cost incurred in the period: 
Beginning work in process inventory: $15,680 
Material added: $422,600 
Labor cost: $99,920 
Overhead: $179,856 
Total cost incurred: $717,056

Equivalent units of production: 
Units started and completed: 15,000 
Ending work in process inventory: 
Materials: 90% x 2,500 units = 2,250 equivalent units 
Conversion: 40% x 2,500 units = 1,000 equivalent units 
Total equivalent units: 18,250

Cost per equivalent unit: $717,056 ÷ 18,250 = $39.29

Cost of ending work in process inventory: 
Materials: 2,250 equivalent units x $39.29 = $88,152.50 
Conversion: 1,000 equivalent units x $39.29 = $39,290 
Total cost of ending work in process inventory: $88,152.50 + $39,290 = $127,442.50

Therefore, the closest answer choice is B) $33,294.

Haffner Corporation Uses the Weighted-Average Method in Its Process Costing