Question

process costing system. The following information Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses pertains to the final department of Giddings's blockbuster drug called Solcax. Beginning work-in-process (40% completed) Transferred-in Normal spoilage Abnormal spoilage Good units transferred out Ending work-in-process (1/3 completed) Conversion costs in beginning inventory Current conversion costs 800 units 4,000 units 400 units 200 units 3,600 units 600 units $2,560 $6,900 Giddings calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of Solcax that are spoiled are the result of defects not discovered before inspection of finished units. Materials are added at the beginning of the process. Using the weighted-average method, answer the following question: What are the total conversion costs in ending inventory?

Answer 1

Answer
Option D is correct : $ 430
Explanation
Answer is $ 539.
Explanation:
			Physical	Conversion
UNITS			Units	Equiv. Units
Units to account for:
Beginning work in process			$         800
Started in production			$      4,000
Total Units to account for			$      4,800
Units Accounted for:
Completed and transferred			$      3,600	$         3,600
Normal Spoilage			$         400	$            400
Abnormal Spoilage			$         200	$            200
Ending work in process			$         600	$            200
Total Units to be accounted for			$      4,800	$         4,400
				Conversion
COSTS				Cost
Costs to account for:
Beginning work in process				$         2,560
cost added during the period				$         6,900
Total cost to account for				$         9,460
Divided by: Total EUP				$         4,400
Cost per equivalent unit				$                2
Ending WIP equivalent units				$            200
Conversion cost in Endingg WIP				$            430