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The Aniquilado Company uses process costing and has several production departments. Aniquilado uses the weighted average...

The Aniquilado Company uses process costing and has several production departments. Aniquilado uses the weighted average method. In the firm's first production department, all direct are added when the units are 50% complete with respect to conversion costs. The firm has the following inventory information.

BWIP units (75% complete with respect to conversion costs): 5,000
Units completed: 150,000
EWIP units (40% complete with respect to conversion costs): 10,000

This period, the firm has calculated the following cost per equivalent unit rates for direct materials and conversion costs.

$50 Direct material cost per equivalent unit.
$75 Conversion cost per equivalent unit

What is the firm's ending WIP balance for this period (round to cents if necessary)?
Answers: a.

$300,000
b.

$18,750,000
c.

$500,000
d.

$19,050,000
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Homework Answers

Answer #1
Ending WIP 10000
Conversion stage 40%
Since material is added at 50% conversion and hence no material cost is added
for conversion cost, equivelent units 40%
for conversion cost, equivelent units               4,000
Averge conversion cost 75
Ending WIP cost 4000*75
Ending WIP cost           300,000
So option A is correct
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