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:

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Chapter1: Financial Statements And Business Decisions
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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:

ASSEMBLY DEPARTMENT

 

Units

Cost

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 Overhead – P2M

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

 

FINISHING DEPARTMENT

 

Units

Cost

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

December 31, 2021

30,000 units – 10% incomplete as to conversion cost

?

Units started during the year

 

DM cost added during 2021 – P30M

DL Cost added during 2021 – P40M

FOH cost added during 2021 – P10M

 

Additional information for the year:

  1. It is the company’s policy to add conversion cost evenly throughout the period in the two departments.
  2. 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.
  3. There is no spoilage in both departments.

 

In the finishing department, what is the cost assigned to December 31, 2021 work-in-process inventory?

  1. 6,668,130
  2. 6,276,330
  3. 6,401,800
  4. 9,235,100

 

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