TryFit Co.uses process costing to account for the production of energy food bars.Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process.Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs.April costs were $36,000 for materials and $40,000 for conversion costs.During April 8,000 units were completed.Ending work in process inventory was 4,000 units (100% complete for materials,50% for conversion).The value of units completed and transferred out using the weighted average method would be closest to:
A)$63,866.40
B)$65,000.00
C)$76,000.00
D)$79,833.00

Question

Quizplus · Accepted Answer

The weighted average method assigns the average cost of production to all units completed and transferred out during the period. The average cost is calculated by dividing the total cost of production by the total number of units produced. In this case, the total cost of production is $36,000 + $40,000 = $76,000. The total number of units produced is 8,000. Therefore, the average cost per unit is $76,000 / 8,000 = $9.50. The value of units completed and transferred out is 8,000 units x $9.50 per unit = $63,866.40.

TryFit CoUses Process Costing to Account for the Production of Energy