Strap Company uses the weighted-average method in its process costing system. Th

Question

Strap Company uses the weighted-average method in its process costing system. The company has only one processing department. The ending work in process inventory consists of 10,000 units. 60% complete with respect to materials. The total dollar value of this inventory is $38,000. The costs per equivalent unit are $5.00 for materials and $4.00 for conversion costs for the period. With respect to conversion costs, the ending work in process inventory is:

A. 10% complete
B. 20% complete
C. 38% complete
D. 30% complete

Explanation / Answer

Total value of Inventory is $38,000 for 10,000 units

Units are 60% comlete for Material
so per unit Material cost used is 60% of $5 = $3
Material cost in Inventory of 10000 units is 10000*$3 = $30,000

So Balance Invenory cost of $8000 ($38,000 - $30,000) is conversion cost for equivalent 10000 units........ANS

So per unit conversion cost is $8000/10000 = $0.80
Per unit Convsersion cost is $4
So Unit is complete in terms of converiso = $0.80/$4.0 = 20%

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.