Asked by Sabrina Benavides on Jul 12, 2024
Verified
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
Ending Work
Refers to the final stages or completion of tasks or projects in a given period.
Process Inventory
Refers to the goods and materials held by a company during its manufacturing process but not yet completed.
Cost System
A method or set of procedures used by organizations to track, record, and analyze costs associated with their operations.
- Employ the process costing approach in various settings to evaluate expenses.
Verified Answer
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.
Learning Objectives
- Employ the process costing approach in various settings to evaluate expenses.
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