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

question 6

Essay

Marcellus Corporation, which uses the weighted-average method of process costing, reported the following as of February 1:
Conversations with the production supervisor revealed that materials are introduced at the start of the process and conversion cost is incurred evenly throughout manufacturing. The company started 29,000 units during the month. Goods in process at the beginning and end of February totaled 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 × 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.

---

Definitions:

Clean Audit Opinion

An auditor's report that states financial statements of a company are free from material misstatement and are presented fairly in accordance with the applicable financial reporting framework.

Unmodified Opinion

An auditor's report that concludes the financial statements of an entity present fairly its financial position, without any reservations.

Management Discussion and Analysis

A section in an annual report where management provides an overview of the previous period's operations, current financial status and future outlook.

Dividends per Share

The amount of money a company pays out to its shareholders for each share they own during a specific period.