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Haydn Corporation uses the weighted-average method in its process costing system. The ending work-in-process inventory consists...

Haydn Corporation uses the weighted-average method in its process costing system. The ending work-in-process
inventory consists of 10,000 units. The ending work-in-process inventory is 100% complete with respect to
materials. The cost per equivalent unit for the period is $3.75 for material and $1.25 for conversion cost.

If the ending balance of work-in-process inventory account is $40,625, what is the percentage of completion
with respect to conversion cost in the ending work-in-process inventory account?

A. 8%
B. 92%
C. 25%
D. 31%
E. None of the above

Business   Accounting   
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Homework Answers

Answer #1

Solution:

Materials cost in ending work in process = equivalent unuts for materials *Materials Cost per equivalent unit = 10000*100%*$3.75 = $37,500

Conversion cost in ending work in process = Ending balance of work in process - materials cost = $40625 -$37500 = $3,125

Therefore, equivalent units for conversion in Ending WIP = Conversion cost/ cost per equivalent unit for conversion = $3125/ $1.25 = 2500 units

% completion for conversion in ending work in process = Equivalent units in ending WIP/ ending WIP Units = 2500/10000 = 25%

Hence, option "C" is correct.

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