Bistrol Corporation Uses the Weighted-Average Method in Its Process Costing

question 21

Multiple Choice

Bistrol Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were:
A total of 8,400 units were started and 7,500 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 70% complete with respect to materials and 60% complete with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
-The cost of ending work in process inventory in the first processing department according to the company's cost system is closest to:

• A) $68,067
• B) $64,115
• C) $74,801
• D) $106,859

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Definitions:

LIFO Advantage

A financial benefit that comes from using the Last In, First Out method of inventory valuation, often resulting in lower taxes in periods of inflation.

Rising Prices

A situation in an economy where the general level of prices for goods and services is increasing, often referred to as inflation.

Holding Gains

Holding gains are the increased values of assets that a company holds, realized when the asset is sold or revalued.

FIFO Cost Flow

An inventory valuation method where the cost of the earliest goods purchased are the first to be recognized as cost of goods sold.