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

question 53

Multiple Choice

Atwich Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of these units in beginning inventory were: A total of 5,100 units were started and 4,400 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 75% complete with respect to materials and 10% 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)$26,342
• B)$62,679
• C)$8,357
• D)$83,572

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Definitions:

Absorption Costing

An accounting method that includes all manufacturing costs - direct labor, direct materials, and overhead - in the cost of a product.

Net Operating Income

A company's revenue minus its operating expenses, not including taxes and interest.

Fixed Manufacturing Overhead

The total of all production costs that do not change with the level of production output, such as salaries of managers, rent, and property taxes.

Variable Costing

Variable Costing is an accounting method that only assigns variable costs to inventory, treating fixed costs as period expenses.