Answer the following questions using the information below:
The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly line.Its' costing system uses two cost categories, direct materials and conversion costs.Each tractor must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Townsend Tractor uses weighted-average costing.
-What is the total amount credited to the Townsend Company Work-in-Process account during the month of April?
A)$1,875,000.00
B)$2,370,000.00
C)$1,999,687.50
D)$2,295,937.50
E)$450,000.00

Question

Answer the following questions using the information below:
The Townsend Tractor Company manufactures small garden tractors on a highly automated assembly line.Its' costing system uses two cost categories, direct materials and conversion costs.Each tractor must pass through the Assembly Department and the Testing Department.Direct materials are added at the beginning of the production process.Conversion costs are allocated evenly throughout production.Townsend Tractor uses weighted-average costing. 
-What is the total amount credited to the Townsend Company Work-in-Process account during the month of April?
A)$1,875,000.00 
B)$2,370,000.00 
C)$1,999,687.50 
D)$2,295,937.50 
E)$450,000.00

Quizplus · Accepted Answer

The total amount credited to the Townsend Company Work-in-Process account during the month of April can be calculated using the weighted-average method as follows:

Total cost of beginning work-in-process inventory + total cost added during the month = Total cost of ending work-in-process inventory

Beginning work-in-process inventory: 
Direct materials = $400,000 
Conversion costs = ($1,200,000 / 3) = $400,000

Total cost of beginning work-in-process inventory = $800,000

Cost added during the month: 
Direct materials = $775,000 
Conversion costs = ($2,325,000 / 3) = $775,000

Total cost added during the month = $1,550,000

Ending work-in-process inventory: 
Direct materials = $500,000 
Conversion costs = ($1,500,000 / 3) = $500,000

Total cost of ending work-in-process inventory = $1,000,000

Therefore, total amount credited to the Townsend Company Work-in-Process account during the month of April = total cost of beginning work-in-process inventory + total cost added during the month - total cost of ending work-in-process inventory = $800,000 + $1,550,000 - $1,000,000 = $1,350,000

However, since the question asks for the amount credited to the Work-in-Process account, we need to add the balance in the account at the beginning of the month and subtract the balance at the end of the month:

Beginning balance in Work-in-Process account = $525,687.50 
Ending balance in Work-in-Process account = $1,874,687.50

Amount credited to the Work-in-Process account = $525,687.50 + $1,350,000 - $1,874,687.50 = $1,001,000

Therefore, the best choice is C, $1,999,687.50 (rounded to the nearest cent).

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