Claremore Industries uses a weighted-average process-costing system. All materials are added at the beginning of the process; conversion costs are incurred evenly throughout production. The company finished 40,000 units during the period and had 15,000 units in progress at year-end, the latter at the 40% stage of completion. Total material costs amounted to $220,000; conversion costs were $414,000. The cost of the ending work in process is: Multiple Choice $54,000. $78,000. $114,000. $195,000. None of the answers is correct.

$78,000

Explanation:

Calculation for The cost of the ending work in process

First step is to calculate the Material cost per unit.

Material cost per unit = $220,000 / (40,000+15,000)

Material cost per unit= $220,000 / 55,000

Material cost per unit= $4

Second step is to calculate the Conversion cost per unit

Conversion cost per unit= $414,000 / (40,000 + (15,000*40%)

Conversion cost per unit= $414000 / 46000

Conversion cost per unit= $9

Third step is to calculate total cost per equivalent unit

Total cost per equivalent unit= $4 + $9

Total cost per equivalent unit= $13

Fourth step is to calculate the equivalent unit of the ending work in process

Equivalent unit of the ending work in process= 15,000 × 40%

Equivalent unit of the ending work in process= 6,000

Now let calculate cost of the ending work in process

Cost of the ending work in process = 6,000 × $13

Cost of the ending work in process = $78,000

Therefore The cost of the ending work in process is $78,000

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