Read, Inc. instituted a new process in October 2008. During October, 10,000 units were started in Department A. Of the units started, 8,000 were transferred to Department B, and 2,000 remained in Work-in-Process at October 31, 2008. The Work-in-Process at October 31, 2008, was 100% complete as to material costs and 50% complete as to conversion costs. Material costs of $27,000 and conversion costs of $36,000 were charged to Department A in October. What were the total costs transferred to Department B assuming Department A uses weighted-average process costing? A. $46,900B. $53,600C. $56,000D. $57,120

Question

Averi

Business

11 December, 18:22

Read, Inc. instituted a new process in October 2008. During October, 10,000 units were started in Department A. Of the units started, 8,000 were transferred to Department B, and 2,000 remained in Work-in-Process at October 31, 2008. The Work-in-Process at October 31, 2008, was 100% complete as to material costs and 50% complete as to conversion costs. Material costs of $27,000 and conversion costs of $36,000 were charged to Department A in October. What were the total costs transferred to Department B assuming Department A uses weighted-average process costing? A. $46,900B. $53,600C. $56,000D. $57,120

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Answers (1)

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Skye Noble · Answer 1

B. $53,600

Explanation:

beginning 0

completed 8,000

WIP 2,000 at 100% materials 50% conversion cost

Materials

Equivalent Units units complete + complete portion of ending WIP

8,000 + 2,000 x 100% = 10,000

Cost per unit 27,000/10,000 = 2.7

Conversion cost

Equivalent Units units complete + complete portion of ending WIP

8,000 + 2,000 x 50% = 9,000

Cost per unit 36,000/9,000 = 4

Total cost per equivalent unit Materials + CC

2.7 + 4 = 6.7

Transferred-out

8,000 x 6.7 = 53,600