Question

Ferdinand T. Corporation uses the weighted-average method in its process-costing system. Operating data for the first processing department for March appear below for the physical flow of units, and for direct materials (DM) and conversion costs (CC). Units % of completion: DM % of completion: CC Beginning WIP inventory 1,820 60% 50% Started into production during September: 22,000 Ending WIP inventory 3,700 90% 70% DM CC Beginning WIP inventory $6552 $5096 Cost added during March $142058 $70231 Q: Determine the cost of the units transferred out to the next department.

Answer 1

The cost of the units transferred out to the next department: DM =127,507, CC= $66,736

Step-by-step explanation:

DM CC

Units transferred out 20,120 20,120

(1,820 + 22,000 - 3,700)

Ending WIP inventory

3700 x 90% 3,330

3700 x 70% 2,590

Equivalent units 23,450 22,710

DM CC

Beginning WIP inventory $6,552 $5,096

Cost added $142,058 $70,231

Total costs $148,610 $75,327

Equivalent units 23,450 22,710

Cost per Equivalent unit 6.34 3.32

(Total costs/Equivalent units)

DM CC Total

Units transferred out 20,120 20,120

X Cost per Equivalent unit 6.34 3.32

Cost of Units transferred out $127,507 $66,736 $194,243