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Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses a process...

Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses a process costing system. The following information pertains to the final department of Giddings's blockbuster drug called Solcax.

Beginning work-in-process (40% completed) 800 units
Transferred-in 4,000 units
Normal spoilage 400 units
Abnormal spoilage 200 units
Good units transferred out 3,600 units
Ending work-in-process (1/3 completed) 600 units
Conversion costs in beginning inventory $ 2,560
Current conversion costs $ 6,900


Giddings calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of Solcax that are spoiled are the result of defects not discovered before inspection of finished units. Materials are added at the beginning of the process. Using the weighted-average method, answer the following question:

What are the total conversion costs in ending inventory?

  • $500.

  • $850.

  • $430.

  • $1,150.

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