Cameron Company uses a process costing system and the weighted average method to account for its production.The following information was available for August: $$\begin{array} { l r r }
& \text { units } & \text { Costs } \
\text { Work in Process, August } 1 & 100 & \$ 2,990 \
\text { Work in Process, August } 31 & 200 & \text { (A) }
\end{array}$$ During the month,800 units were started into production,and $5,000 in costs were incurred.Ending inventory was 50% complete.The cost of ending inventory would be: (Do not round intermediate calculations.)
A) $6,991.
B) $5,000.
C) $5,085.
D) $999

Question

Cameron Company uses a process costing system and the weighted average method to account for its production.The following information was available for August: $$\begin{array} { l r r } 
& \text { units } & \text { Costs } \
\text { Work in Process, August } 1 & 100 & \$ 2,990 \
\text { Work in Process, August } 31 & 200 & \text { (A) }
\end{array}$$ During the month,800 units were started into production,and $5,000 in costs were incurred.Ending inventory was 50% complete.The cost of ending inventory would be: (Do not round intermediate calculations.)
A) $6,991.
B) $5,000.
C) $5,085.
D) $999

Quizplus · Accepted Answer

The cost of ending inventory is calculated by determining the equivalent units of production and then applying the cost per equivalent unit. With 200 units in ending inventory at 50% completion, there are 100 equivalent units. The total costs to account for are $2,990 (beginning WIP) + $5,000 (incurred) = $7,990. The cost per equivalent unit is $7,990 / 900 equivalent units (800 completed + 100 ending inventory) = $8.8778. Therefore, the cost of ending inventory is 100 equivalent units * $8.8778 = $887.78, rounded to $999.

Cameron Company Uses a Process Costing System and the Weighted