Question

Beattie Company completed and transferred out 2,300 units in May 2008. There were 200 units in the Work-in-Process Inventory on May 31, 2008, 30% complete as to conversion costs and 100% complete as to materials. The month's charges for conversion costs and material costs were $9,440 and $6,250, respectively. There was no beginning inventory on May 1, 2008. What is the cost of the work transferred-out during May? A. $8,510B. $14,950C. $15,690D. $16,250

Answer 1

$14,950

Step-by-step explanation:

2300 completed units

200 100% materials 30% conversion

The equivalent units will be:

complete units + ending inventory completion

Materials Cost 6,250

Equivalent units

2,300 + 200 x 100% = 2,500

Materials Equivalent cost per unit 6,250 / 2,500 = 2.5

Conversion Cost 9,440

Equivalent units

2,300 + 200 x 30% = 2,360

Materials Equivalent cost per unit 9,400/2,360 = 4

Once we got the two cost component, we add them to get the equivalent unit total cost. Then, we multiply by 2,300 to get total cost for the transferred units.

Total cost per equivalent unit = 6.5

Transferred units 2,300

Cost of transferred unit 2,300 x 6.5 = 14,950