Marcus Corporation, Which Uses the Weighted-Average Method of Process Costing

question 28

Essay

Marcus Corporation, which uses the weighted-average method of process costing, reported the following as of February 1:
$\begin{array}{l}\text { Work in process, Feb. 1: }\\\begin{array} { l r } \text { Direct material } & \$ 42,000 \\\text { Conversion } & 20,000 \\\text { February production costs: } & \\\text { Direct material } & 470,000\\\text { Conversion } &280,000 \end{array}\end{array}$ Conversations with the production supervisor revealed that materials are introduced at the start of the process and conversion costs are incurred evenly throughout the manufacturing process. The company started 29,000 units during the month. Goods in process at the beginning and end of February totalled 3,000 units and 5,000 units, respectively, the latter batch being 60% complete.
Just prior to leaving on vacation, a trusted staff assistant was asked to compute the cost of February's ending work-in-process inventory. Her calculations showed a huge rise in unit cost when compared with the February 1 figures, soaring to $250 [($470,000 + $280,000) ÷ 3,000 units (5,000 units x 60%)].
Required:
A. Did the staff assistant make any errors in her calculations? Explain.
B. Analyze the company's production volume and determine the proper equivalent-unit figures for February.
C. Calculate the proper unit costs for February.
D. Calculate the cost of the February 28 work-in-process inventory.

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Definitions:

MV

MV, short for "Mean Value," is a measure used in statistics and mathematics to denote the average or central value of a set of numbers.

PQ

PQ, in the context of mathematics, often stands for a specific pair of points or variables in an equation or algorithm, representing a particular problem or query to be solved.

Operating Leverage

The extent to which a company uses fixed costs in its cost structure, impacting its earnings volatility.

Net Operating Income

Net Operating Income (NOI) is a financial metric that calculates a company's income after all operating expenses, excluding taxes and interest, have been deducted from total revenue.