Question

Hache 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 700 Materials costs $8,000 Conversion costs $7,800 Percent complete with respect to materials 50% Percent complete with respect to conversion 35% Units started into production during the month 5,200 Units transferred to the next department during the month 4,400 Materials costs added during the month $90,300 Conversion costs added during the month $125,600 Ending work in process inventory: Units in ending work in process inventory 1,500 Percent complete with respect to materials 50% Percent complete with respect to conversion 30% Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. The total cost transferred from the first processing department to the next processing department during the month is closest to: $274,893 $215,900 $231,700 $205,005

Answer 1

Equivalent unit :

	Whole unit	%	EUP-material	%	EUP-Conversion
Units transferred out	4400	100%	4400	100%	4400
Ending work in process	1500	50%	750	30%	450
Equivalent unit of production	5900		5150		4850

Cost per equivalent unit of material = (8000+90300)/5150 = 19.087

Cost per equivalent unit of conversion = (7800+125600)/4850 = 27.505

Cost of transferred from first processing department to the next department = (27.505+19.087)*4400 = $205005

So answer is d) $205005