Question

The Mixing Department of Premium Foods had 50,000 equivalent units of materials for October. Of the 50,000 units, 25,000 units were completed and transferred to the next department, and 25,000 units were 35% complete. Premium Foods's costs per equivalent unit of production are $0.96 for direct materials and $0.70 for conversion costs. All of the materials are added at the beginning of the process. Conversion costs are added evenly throughout the process and the company uses the weighted-average method.Calculate the cost of the 25,000 units completed and transferred out and the 25,000 units, 35% complete, in the ending Work-in-Process Inventory.

Answer 1

Step-by-step explanation:

The computation of the cost of 25,000 units completed and transferred out is shown below;

( in $)

Costs Direct materials Conversion costs Total costs

Cost accounted for

completed

and transferred

out 24,000 17,500 41,500

(25,000 × $0.96) (25,000 × $0.70)

Ending

work in

process 24,000 6,125 30,125

(25,000 × $0.96) (25,000 × $0.96 × 35%)

Total cost

accounted for 48,000 23,625 71,625