Walborn Corporation uses the weighted-average method in its process costing system. The beginning work in process inventory in a particular department consisted of 18,000 units, 100% complete with respect to materials cost and 40% complete with respect to conversion costs. The total cost in the beginning work in process inventory was $25,200. A total of 53,000 units were transferred out of the department during the month. The costs per equivalent unit were computed to be $1.6 for materials and $3.3 for conversion costs.

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

a.$259,700

b.$254,180

c.$189,740

d.$225,380

The total cost of the units completed and transferred out of the department was a.$259,700

Explanation:

The Concept of Equivalent units measures the units in terms of completion percentage in their inputs

Calculation of Equivalent Units in Goods Finished and Transferred out of the department:

It is important to note that physical units finished and transfered were 53,000 units

Therefore equivalent units were

Materials 100% * 53,000 = 53,000

Conversion Cost 100% * 53,000 = 53,000

Calculation of total cost of the units completed and transferred out of the department

Materials = 53,000*$1.60 = $84,800

Conversion Cost = 53,000 * $ 3.30 = $174,900

Total = $259,700