Question

Getting Away With It (All Messed Up), Inc. provided the following information for its Mixing Department for the current period:

• Cost per equivalent unit with respect to direct materials: $1.60
• Cost per equivalent unit with respect to conversion costs: $3.25
• Equivalent units completed and transferred out to the Bottling Department:
  • Direct materials: 160,000 EUP
  • Conversion costs 160,000 EUP
• Equivalent units in the Mixing Department’s ending WIP inventory:
  • Direct materials: 50,000 EUP
  • Conversion costs 42,000 EUP

What is the amount of costs the firm should assign to the Mixing Department’s ending WIP inventory?

	a.	$216,500
	b.	$446,200
	c.	$80,000
	d.	$136,500
	e.	$776,000

Answer 1

Correct answer---------(a) $216,500

Working

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit	Ending WIP
		Units	Cost Allocated
Material	$ 1.60	50,000	$   80,000.00
Conversion	$ 3.25	42,000	$ 136,500.00
TOTAL	$ 216,500	TOTAL	$ 216,500