Ogden Company Uses the Weighted-Average Method in Its Process Costing

question 54

Multiple Choice

Ogden Company uses the weighted-average method in its process costing system.Information for the month of January concerning Department A,the first stage of the company's production process,follows:
$$\begin{array} { | l | r | r | } \hline & \text { Materials } & \text { Conversion cast } \\\hline \text { Work in process, beginning } & \$ 8,000 & \$ 6,000 \\\hline \begin{array} { l } \text { Current added during } \\\text { January }\end{array} & \$ 40,000 & \$ 32,000 \\\hline \begin{array} { l } \text { Equivalent units of } \\\text { production }\end{array} & 100,000 & 95,000 \\\hline \text { Cost per equivalent unit } & \$ 0.48 & \$ 0.40 \\\hline\end{array}$$
$\begin{array}{|l|r|}\hline \begin{array}{l}\text { Units completed and transferred to the next } \\\text { department }\end{array} & 90,000 \text { units } \\\hline \text { Work in process, ending } & 10,000 \text { units } \\\hline\end{array}$

Materials are added at the beginning of the process.The ending work in process is 50% complete with respect to conversion costs.What cost would be recorded for the ending work-in-process inventory?

• A) $6,800.
• B) $8,800.
• C) $3,400.
• D) $4,400.

---

Definitions:

Activity Rate

The cost driver rate that is used in activity-based costing to allocate overhead costs to products or services.

Activity Cost Pool

A grouping of all costs related to a specific activity or process in a company, used in activity-based costing.

Activity-Based Costing

A costing method that assigns costs to products based on the activities that go into making them, providing a more detailed measure of costs.

Overhead Applied

A calculation that allocates a portion of estimated overhead costs to individual units of production based on a predetermined formula.