Waterfall Manufacturing produces a chemical pesticide and uses process costing

Question

There are three processing departments-Mixing, Refining, and Packaging. On January 1, the first department-Mixing-had a zero beginning balance. During January, 44,000 gallons of chemicals were started into production. During the month, 35,000 gallons were completed, and 9,000 remained in process, partially completed. In the Mixing Department, all direct materials are added at the beginning of the production process, and conversion costs are applied evenly through the process.

During January, the Mixing Department incurred $52,000 in direct materials costs and $211,000 in conversion costs. At the end of the month, the ending inventory in the Mixing Department was 60% complete with respect to conversion costs. The weighted-average method is used.

The total cost of product in ending inventory was ________. (Round any intermediate calculations two decimal places, and your final answer to the nearest dollar.)
A) $211,000
B) $52,000
C) $38,808
D) $263,000

Answer 1

C .C)
Whole
Units Percent Complete Direct
Materials Percent Complete Conversion
Costs
Completed and transferred out 35,000 100% 35,000 100% 35,000
Ending WIP 9,000 100% 9,000 60% 5,400
Total units accounted for 44,000 44,000 40,400

Costs
incurred Total
equivalent
units Cost per
equivalent
unit Units in
ending
inventory Total cost of
product in
ending
inventory
Direct materials $52,000 44,000 1.18 9,000 10,620
Conversion 211,000 40,400 5.22 5,400 28,188
Total costs 38,808