Question

Esty Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 5,800 50% Conversion costs $ 6,500 30% A total of 7,700 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs $ 85,300 Conversion costs $ 168,000 The ending inventory was 70% complete with respect to materials and 10% complete with respect to conversion costs. 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.)

Multiple Choice

$253,300

$245,441

$316,098

$265,600

Answer 1

Equivalent units of production (EUP)- weighted average method
	Units	%Materials	EUP-Materials	%Conversion	EUP-Conversion
Units completed and transferred out	6600	100%	6600	100%	6600
Ending work in process	1900	70%	1330	10%	190
Total units	8500		7930		6790
Cost per equivalent unit of production	Materials	Conversion
Cost of beginning work in process	5800	6500
Costs incurred this period	85300	168000
Total costs	91100	174500
÷ Equivalent units of production	7930	6790
Cost per equivalent unit of production	11.488	25.700
Total cost accounted for:
Cost of units transferred out	EUP	Cost per EUP	Total cost
Direct materials	6600	11.488	75821
Conversion	6600	25.7	169620
Total cost transferred out				245441
Option 2 $245,441 is correct