Raider Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. Units Percent Complete with Respect to Conversion Beginning work in process inventory 8,500 10 % Transferred in from the prior department during January 72,000 Completed and transferred to the next department during January 71,800 Ending work in process inventory 8,700 80 % The Molding Department's cost per equivalent unit for conversion cost for January was $3.27. How much conversion cost was assigned to the ending work in process inventory in the Molding Department for January?

Question

Business

Avery Osborn

26 February, 05:25

Raider Corporation uses the weighted-average method in its process costing system. The Molding Department is the second department in its production process. The data below summarize the department's operations in January. Units Percent Complete with Respect to Conversion Beginning work in process inventory 8,500 10 % Transferred in from the prior department during January 72,000 Completed and transferred to the next department during January 71,800 Ending work in process inventory 8,700 80 % The Molding Department's cost per equivalent unit for conversion cost for January was $3.27. How much conversion cost was assigned to the ending work in process inventory in the Molding Department for January?

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Kiley · Answer 1

The equivalent ending inventory units of Work in Progress is 6,960 units and the Conversion cost assigned to the WIP Inventory is $22,759.2

Explanation:

The question is to calculate the conversion cost to assign to the closing Work in Progress (W. I. P) Inventory.

The following formula will be used

Cost of Conversion Assigned = The Work in Progress Equivalent Ending Units x Conversion Cost per unit

= WIP Ending equivalent units = 80% x 8,700 units = 6,960 units

Cost of Conversion = $3.27 x 6,960 units = $22,759.2

Based on these, The equivalent ending inventory units of Work in Progress is 6,960 units and the Conversion cost assigned to the WIP Inventory is $22,759.2