Question

Lap Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 80,000 units, 100% complete with respect to materials and 25% complete with respect to conversion costs. The total dollar value of this inventory was $226,000. During the month, 150,000 units were transferred out of the department. The costs per equivalent unit for the month were $2.00 for materials and $3.50 for conversion costs. The cost of the units completed and transferred out of the department was:

Answer 1

Lap Corporation

The cost of the units completed and transferred out of the department was:

= $825,000.

Step-by-step explanation:

a) Data and Calculations:

Beginning work in process inventory = 80,000 units

Degree of completion = 100% materials and 25% conversion

Cost of beginning work in process = $226,000

Units transferred out = 150,000

Materials Conversion Total

Costs per equivalent unit $2 $3.50

Cost of units transferred out $300,000 $525,000 $825,000

= (150,000 * $2) (150,000 * $3.50)