Hawk company employs Weighted Average process costing system in the assembly department and FIFO process costing system in the finishing department concerning its only product which undergoes production in assembly department and finishing department. The following data for the year ended December 31, 2021 are provided:
Hawk company employs Weighted Average
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ASSEMBLY DEPARTMENT |
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Units |
Cost |
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January 01, 2021 |
100,000 units – 40% completed as to conversion cost |
Cost of Direct Material – P3M Cost of Direct Labor – P5M Cost of Factory |
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December 31, 2021 |
150,000 units – 80% completed as to conversion cost |
? |
|
Units started during the year |
400,000 units |
DM cost added during 2021 – P12M DL cost added during 2021 – P15M FOH cost added during 2021 – P13M |
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FINISHING DEPARTMENT |
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Units |
Cost |
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January 01, 2021 |
50,000 units – 70% incomplete conversion cost |
Cost of Transferred in – P10M Cost of Direct material - P6M Cost of Direct labor – P1M Cost of Factory Overhead – 3M |
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December 31, 2021 |
30,000 units – 10% incomplete as to conversion cost |
? |
|
Units started during the year |
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DM cost added during 2021 – P30M DL Cost added during 2021 – P40M FOH cost added during 2021 – P10M |
Additional information for the year:
- It is the company’s policy to add conversion cost evenly throughout the period in the two departments.
- It is the company’s policy to add all direct materials in the assembly department at the start of the process while all direct materials in the finishing department are added at the end of the process.
- There is no spoilage in both departments.
In the finishing department, what is the cost assigned to December 31, 2021 work-in-process inventory?
- 6,668,130
- 6,276,330
- 6,401,800
- 9,235,100
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