The Richmond Company uses the weighted-average method in its process costing system. The company has only a single processing department. The company's ending work in process inventory on August 31 consisted of 18,000 units. The units in the ending work in process inventory were 100% complete with respect to materials and 60% complete with respect to labor and overhead. If the cost per equivalent unit for August was $2.75 for materials and $4.25 for labor and overhead, the total cost assigned to the ending work in process inventory was:
A) $126,000
B) $75,600
C) $80,100
D) $95,400

Question

Quizplus · Accepted Answer

The total cost assigned to the ending work in process inventory is calculated by considering the equivalent units for materials and labor/overhead. Materials are 100% complete, so 18,000 units are considered. Labor and overhead are 60% complete, so 18,000 * 0.6 = 10,800 equivalent units. The total cost is (18,000 units * $2.75) + (10,800 units * $4.25) = $49,500 + $45,900 = $95,400.

The Richmond Company Uses the Weighted-Average Method in Its Process