Question

Rooney Company is a cosmetics manufacturer. Its assembly department receives raw cosmetics from the molding department. The assembly department places the raw cosmetics into decorative containers and transfers them to the packaging department. The assembly department’s Work in Process Inventory account had a $54,000 balance as of August 1. During August, the department incurred raw materials, labor, and overhead costs amounting to $70,000, $89,500, and $83,000, respectively. The department transferred products that cost $324,000 to the packaging department. The balance in the assembly department’s Work in Process Inventory account as of August 31 was $81,000.

Required

Determine the cost of raw cosmetics transferred from the molding department to the assembly department during August.

Cost of raw cosmetics transferred=

Answer 1

The cost of raw cosmetics transferred from the molding department to the assembly department during August by Rooney Company is $215,500, calculated by reconciling the Work in Process Inventory.

Step-by-step explanation:

To determine the cost of raw cosmetics transferred from the molding department to the assembly department during August for Rooney Company, we will use the following Work in Process (WIP) Inventory information:

• Beginning WIP Inventory balance as of August 1: $54,000
• Add: Total costs incurred during August for raw materials, labor, and overhead: $70,000 (raw materials) + $89,500 (labor) + $83,000 (overhead) = $242,500
• Total cost available: $54,000 (beginning balance) + $242,500 (added costs) = $296,500
• Deduct: Cost of goods transferred to the packaging department: $324,000
• Ending WIP Inventory balance as of August 31: $81,000

To find the cost of raw cosmetics transferred, we can prepare a reconciliation of the WIP Inventory:

Beginning WIP Inventory + Costs incurred - Cost of goods transferred = Ending WIP Inventory

$54,000 + $242,500 - Cost of goods transferred = $81,000

After rearranging the formula to solve for the cost of goods transferred, we get:

Cost of goods transferred = $54,000 + $242,500 - $81,000

Cost of goods transferred = $215,500

Therefore, the cost of raw cosmetics transferred from the molding department to the assembly department during August is $215,500.

Answer 2

The cost of raw cosmetics transferred from the molding department to the assembly department during August is $215,500.

Step-by-step explanation:

The cost of raw cosmetics transferred from the molding department to the assembly department during August can be determined by analyzing the changes in the assembly department's Work in Process Inventory account. The opening balance of $54,000, plus the costs incurred for raw materials, labor, and overhead amounting to -

= $70,000 + $89,500 + $83,000

= $296,500.

To find the cost of raw cosmetics transferred, we subtract the ending balance of the Work in Process Inventory account ($81,000) from the total cost incurred ($296,500), resulting in $215,500. Therefore, the cost of raw cosmetics transferred from the molding department to the assembly department during August is $215,500.