Cantor Company had 1,100 units of product in its Work in Process inventory at the beginning of the period. During the period Cantor started 5,300 additional units of product. At the end of the period Cantor had 1,000 units of product in the Work in Process inventory. Cantor estimated the ending Work in Process inventory was 20% complete. The beginning Work in Process inventory cost was $2,540. Cantor added $351,000 of product costs to Work in Process during the period. What is the amount of cost that should be transferred out of Work in Process

Amount to be transferred out of Work in process = 5,400 units * $63.13

= $340,902

Explanation:

Finished goods

opening 1,100

production 5,300

closing - 1,000

Finished good = 5,400 units

Completed goods = finished goods transferred + 20% complete WIP

= 5,400 + 200 units (1000*20%)

= 5,600 units

Total cost = $2,540 + $351,000

=$353,540

Cost per unit = Total cost / Completed goods

= $353,540 / 5,600 units

= $63.13

Even though the 200 units (1000*20%) are completed and are included in calculating the cost per unit but they are not transferred to the finished goods only 5,400 units are transferred to finished goods.

The only reason for the 200 units inclusion on calculating the cost per units is that they are complete and in the total cost they are included as they were incurred alongside the 5400 units transferred.