lohnson Company adds materials, 50% at the start of the process and 50% at the end of the process in Department A. Conversion costs were 70% complete as to the 8,000 units in process on January 1 and 50% complete as to the 6,000 units in process on January 31. During the month of January, 12,000 units were transferred to Department B. An analysis of the costs elating to Work in Process is as follows: Work in process, 1/1: Materials, P12,000; Conversion costs, P25,000 Costs added during the month: Materials, P79,800; Conversion costs, P125,000

lohnson Company adds materials, 50% at the start of the process and 50% at the end of the process in Department A. Conversion costs were 70% complete as to the 8,000 units in process on January 1 and 50% complete as to the 6,000 units in process on January 31. During the month of January, 12,000 units were transferred to Department B. An analysis of the costs elating to Work in Process is as follows: Work in process, 1/1: Materials, P12,000; Conversion costs, P25,000 Costs added during the month: Materials, P79,800; Conversion costs, P125,000

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Description: The cost of ending inventory under WAM is: Johnson Company adds materials, 50% at the start of the process and 50% at the end of theprocess in Department A. Conversion costs were 70% complete as to the 8,000 units inprocess on January 1 and 50% compl

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Inventory Valuation

Before discussing the topic inventory valuation let’s discuss the meaning of inventory. In accounting, inventory is also known as stock. Inventory means all the finished goods, materials, merchandise that a business holds for the purpose of selling it in the market with the motive of earning profit.

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The cost of ending inventory under WAM is:

Johnson Company adds materials, 50% at the start of the process and 50% at the end of the
process in Department A. Conversion costs were 70% complete as to the 8,000 units in
process on January 1 and 50% complete as to the 6,000 units in process on January 31. During
the month of January, 12,000 units were transferred to Department B. An analysis of the costs
relating to Work in Process is as follows:
Work in process, 1/1: Materials, P12,000; Conversion costs, P25,000
Costs added during the month: Materials, P79,800; Conversion costs, P125,000
The cost of ending inventory under WAM is:

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