Question

Kurtulus Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:

Beginning work in process inventory:
Units in beginning work in process inventory		2,100
Materials costs	$	8,500
Conversion costs	$	3,800
Percent complete with respect to materials		55	%
Percent complete with respect to conversion		25	%
Units started into production during the month		8,000
Units transferred to the next department during the month		7,200
Materials costs added during the month	$	111,600
Conversion costs added during the month	$	84,700
Ending work in process inventory:
Units in ending work in process inventory		2,900
Percent complete with respect to materials		70	%
Percent complete with respect to conversion		55	%

The total cost transferred from the first processing department to the next processing department during the month is closest to: (Round "Cost per equivalent unit" to 3 decimal places.)

Garrison 16e Rechecks 2017-08-28

Garrison 16e Rechecks 2019-08-02

Multiple Choice

• $189,115

• $166,140

• $204,805

• $179,815

Answer 1

Option b $ 1,66,140 is correct.

Working note

1)Calculation of Equivalent units.

	Direct Materials	Conversion Costs
Transferred out (A)	7200	7200
Units at ending (B)	2900	2900
Percentage of completion (C)	70%	55%
Equivalent units as end (D=B×C)	2030	1595
Total Equivalent Units (A+ D)	9230	8795

2) Calculation of cost per equivalent unit.

	Direct Materials	Conversion Costs	Total
At begining	$8500	$3800	$12,300
Added during the month	$1,11,600	$84,700	$1,96,300
Costs to be accounted for	$1,20,100	$ 88,500	$208,600
Total Equivalent units	9230	8795
Cost per Equivalent unit	13.012	10.063	23.075

Total Cost of Unit transferred from first processing department to next processing department is 7200 x 23.075 = $ 1,66,140