Question 24 (2 points) The Richmond Corporation uses the weighted-average method

Question

Question 24 (2 points) The Richmond Corporation 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 equivalept 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: O $126,000 $75,600 O $80,100 $95,400 Save

Explanation / Answer

The ending inventory is 18000 units. It is 100% complete as to materials. So the valuation should be based on total equivalent $2.75. So the value of ending inventory with respect to materials is 18000x2.75 = 49,500.

The ending inventory is only 60% complete as to labour and overheads. So the equivalent units of ending inventory = 18000x60%= 10800. So the value of inventory with respect to labor and overheads = 10800x4.25 = 45900

So the value of ending inventory is 49500+45900 = $95400

So the answer is Option D

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