Reference no: EM132582980

At the HI-Q Industrial Co., the process begins with the blending of various chemicals and ends with canning of the paint after which the gallon cans are sent to the Shipping Dept. for packing and crating. Direct labor and overhead are continuously added during the processing. Overhead is applied at the rate of 30 per direct labor hour. Data for the month of October 19x4 follows.

Physical Units

Work in process, beginning inventory        4,000 gallons
Raw materials-chemicals (7% complete)
Direct labor (25% complete)
Overhead (25% complete)
Started in process                                21,000 gallons
Completed and transferred                      20,000 gallons

Work in process ending inventory

Raw materials-chemicals (100% complete)
Raw materials-cans (7% complete)
Cost for the month

Work in process, beginning inventory

Raw-materials-chemicals                    456,000
Direct Labor (100 per hour)                   62,500
Overhead                                           18,750

Current costs added:

Raw materials-chemicals                 2,284,000
Raw materials-cans                          70,000
Direct labor (100 per hour)                330,000
Overhead                                   105,000

Question 1: Using weighted-average method, the cost of raw materials-chemicals in the work in process ending inventory was

Option A. 438,400

Option B. 548,000

Option C. 571,000

Option D. 687,000