Question

Assume a company uses the weight-average method in its process costing. Its Work in Process T-account for the Refining Department for August is: Work in Process: Refining Department August 1 balance 62,000 Completed and transferred to Finished Goods ? Materials 310,000 Direct labor 72,000 Overhead 181,000 August 31 balance ? The August 1 work in process inventory consisted of 6,000 units with $36,000 in materials cost and $26,000 in conversion cost. The August 1 work in process inventory was 100% complete with respect to materials and 40% complete with respect to conversion. During August 48,000 units were started into production. The August 31 work in process inventory consisted of 8,000 units that were 100% with respect to materials and 60% complete with respect to conversion. The materials cost included in the Refining Department’s ending work in process inventory is closest to:

Answer 1

Weighted Average Method
Units in Production : August 1	6000
Units started in August	48000
Total Units into the Production	54000
Units in Production :August 31	8000
Units transferred to the Finished goods (54000-8000)	46000
	Total	Equivalent Units
	Material
Units transferred to finindhed goods	46000	46000
Ending Work in Process ( 8000 * 100% )	8000	8000
Total Equivalent Units	54000	54000
Total Cost
Begining Work In Process	36000
Add : Cost added during the month	310000
Total Cost	346,000
Equivalent Cost per unit (346,000 / 54000)	$ 6.41
Amount included in the Finished goods (46000*6.41)	$294.860
Amount transferred from the Refining Department to Finished Goods is closest to :	$294,860

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