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

question 39

Multiple Choice

Scheney Company uses the weighted-average method in its process costing system. The company's work in process stock on March 31 consisted of 20,000 units. The units in the ending work in process stock were 100% complete with respect to materials and 70% complete with respect to labour and overhead. If the cost per equivalent unit for August was £2.50 for materials and £4.75 for labour and overhead, the total cost in the March 31 work in process stock was:

• A)£145,000
• B)£116,500
• C)£101,500
• D)£78,500

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Definitions:

Labor Efficiency Variance

The difference between the actual hours worked and the standard hours expected to produce a certain level of output, multiplied by the standard labor rate.

Labor Rate Variance

The difference between the actual cost of labor and the expected (or standard) cost, often used in manufacturing to measure efficiency and cost management.

Favorable

A term typically used in budgeting and accounting to describe variances or outcomes that are better than expected or budgeted figures.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the standard variable overhead estimated.