{"id":186692,"date":"2025-01-26T06:03:30","date_gmt":"2025-01-26T06:03:30","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=186692"},"modified":"2025-01-26T06:03:32","modified_gmt":"2025-01-26T06:03:32","slug":"haffner-corporation-uses-the-weighted-average-method-in-its-process-costing-system","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/01\/26\/haffner-corporation-uses-the-weighted-average-method-in-its-process-costing-system\/","title":{"rendered":"Haffner Corporation uses the weighted-average method in its process costing system"},"content":{"rendered":"\n<p>Haffner Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:<\/p>\n\n\n\n<p>Beginning work in process inventory:<\/p>\n\n\n\n<p>500<\/p>\n\n\n\n<p>Units in beginning work in process inventory<\/p>\n\n\n\n<p>$7,800<\/p>\n\n\n\n<p>Materials costs .<\/p>\n\n\n\n<p>$9,100<\/p>\n\n\n\n<p>Conversion costs<\/p>\n\n\n\n<p>85%<\/p>\n\n\n\n<p>Percentage complete with respect to materials<\/p>\n\n\n\n<p>55%<\/p>\n\n\n\n<p>Percentage complete with respect to conversion<\/p>\n\n\n\n<p>7,000<\/p>\n\n\n\n<p>Units started into production during the month<\/p>\n\n\n\n<p>6,100<\/p>\n\n\n\n<p>Units transferred to the next department during the month<\/p>\n\n\n\n<p>$102,700<\/p>\n\n\n\n<p>Materials costs added during the month .<\/p>\n\n\n\n<p>$184,400<\/p>\n\n\n\n<p>Conversion costs added during the month .<\/p>\n\n\n\n<p>500<\/p>\n\n\n\n<p>Ending work in process inventory:<\/p>\n\n\n\n<p>Units in ending work in process inventory<\/p>\n\n\n\n<p>1,400<\/p>\n\n\n\n<p>Percentage complete with respect to materials<\/p>\n\n\n\n<p>60%<\/p>\n\n\n\n<p>Percentage complete with respect to conversion<\/p>\n\n\n\n<p>50%<\/p>\n\n\n\n<p>The cost of ending work in process inventory in the first processing department according to the company&#8221;s cost system is closest to:<\/p>\n\n\n\n<p>A) $37,278<\/p>\n\n\n\n<p>B) $33,293<\/p>\n\n\n\n<p>C) $62,129<\/p>\n\n\n\n<p>D) $31,065<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>To determine the cost of the ending work in process inventory using the weighted-average method, we will follow these steps:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 1: Calculate the Equivalent Units for Ending Work in Process Inventory<\/h3>\n\n\n\n<p><strong>Equivalent Units for Materials:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The number of units in the ending work in process inventory is 1,400.<\/li>\n\n\n\n<li>Since the percentage complete for materials is 60%, the equivalent units for materials will be: [<br>1,400 \\text{ units} \\times 60\\% = 840 \\text{ equivalent units for materials}<br>]<\/li>\n<\/ul>\n\n\n\n<p><strong>Equivalent Units for Conversion Costs:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The percentage complete for conversion costs is 50%.<\/li>\n\n\n\n<li>The equivalent units for conversion will be: [<br>1,400 \\text{ units} \\times 50\\% = 700 \\text{ equivalent units for conversion}<br>]<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Step 2: Calculate the Cost per Equivalent Unit<\/h3>\n\n\n\n<p>We need to calculate the cost per equivalent unit for materials and conversion costs using the weighted-average method.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Materials Costs:<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Beginning materials costs = $7,800.<\/li>\n\n\n\n<li>Materials costs added during the month = $102,700.<\/li>\n\n\n\n<li>Total materials costs = $7,800 + $102,700 = $110,500.<\/li>\n<\/ul>\n\n\n\n<p>Total equivalent units for materials = units transferred (6,100) + equivalent units in ending WIP (840):<\/p>\n\n\n\n<p>[<br>6,100 + 840 = 6,940 \\text{ equivalent units for materials}<br>]<\/p>\n\n\n\n<p>Cost per equivalent unit for materials:<\/p>\n\n\n\n<p>[<br>\\frac{\\$110,500}{6,940} = \\$15.91 \\text{ per equivalent unit for materials}<br>]<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Conversion Costs:<\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Beginning conversion costs = $9,100.<\/li>\n\n\n\n<li>Conversion costs added during the month = $184,400.<\/li>\n\n\n\n<li>Total conversion costs = $9,100 + $184,400 = $193,500.<\/li>\n<\/ul>\n\n\n\n<p>Total equivalent units for conversion = 6,100 (units transferred) + 700 (equivalent units in ending WIP):<\/p>\n\n\n\n<p>[<br>6,100 + 700 = 6,800 \\text{ equivalent units for conversion}<br>]<\/p>\n\n\n\n<p>Cost per equivalent unit for conversion:<\/p>\n\n\n\n<p>[<br>\\frac{\\$193,500}{6,800} = \\$28.44 \\text{ per equivalent unit for conversion}<br>]<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 3: Calculate the Cost of Ending Work in Process Inventory<\/h3>\n\n\n\n<h4 class=\"wp-block-heading\">Materials Cost in Ending WIP:<\/h4>\n\n\n\n<p>The ending WIP consists of 840 equivalent units for materials, so the materials cost in the ending WIP is:<\/p>\n\n\n\n<p>[<br>840 \\text{ equivalent units} \\times \\$15.91 = \\$13,358.40<br>]<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Conversion Cost in Ending WIP:<\/h4>\n\n\n\n<p>The ending WIP consists of 700 equivalent units for conversion, so the conversion cost in the ending WIP is:<\/p>\n\n\n\n<p>[<br>700 \\text{ equivalent units} \\times \\$28.44 = \\$19,908<br>]<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Step 4: Total Cost of Ending Work in Process Inventory<\/h3>\n\n\n\n<p>The total cost of ending work in process inventory is the sum of the materials cost and the conversion cost:<\/p>\n\n\n\n<p>[<br>\\$13,358.40 \\text{ (materials)} + \\$19,908 \\text{ (conversion)} = \\$33,266.40<br>]<\/p>\n\n\n\n<p>This amount rounds closest to <strong>$33,293<\/strong>, which is option <strong>B<\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Conclusion:<\/h3>\n\n\n\n<p>The correct answer is <strong>B) $33,293<\/strong>. This calculation considers both the equivalent units and the weighted average cost method to allocate materials and conversion costs to the ending work in process inventory.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Haffner Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: 500 Units in beginning work in process inventory $7,800 Materials costs . $9,100 Conversion costs 85% Percentage complete with respect to materials 55% Percentage complete [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-186692","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186692","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=186692"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/186692\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=186692"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=186692"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=186692"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}