Strap Company uses the weighted-average method in its process costing system. Th
ID: 2435486 • Letter: S
Question
Strap Company uses the weighted-average method in its process costing system. The company has only one processing department. The ending work in process inventory consists of 10,000 units, 60% complete with respect to materials. The total dollar value of this inventory is $38,000. The costs per equivalent unit are $5.00 for materials and $4.00 for conversion costs for the period. With respect to conversion costs, the ending work in process inventory is:(I need to see how to manually answer this question).
Explanation / Answer
Total value of Inventory is $38,000 for 10,000 units Units are 60% comlete for Material so per unit Material cost used is 60% of $5 = $3 Material cost in Inventory of 10000 units is 10000*$3 = $30,000 So Balance Invenory cost of $8000 ($38,000 - $30,000) is conversion cost for equivalent 10000 units........ANS So per unit conversion cost is $8000/10000 = $0.80 Per unit Convsersion cost is $4 So Unit is complete in terms of converiso = $0.80/$4.0 = 20%