Sullivan Company uses process costing. Its Sewing Department had an equivalent cost per unit for direct materials of $0.75 and for conversion costs of $0.50 during May. There were 20,000 units completed and transferred to Finished Goods, and 8,000 units in ending Work in Process inventory that were 100% complete with respect to direct material and 75% complete with respect to conversion costs. What was the amount transferred to Finished Goods?

Question

Quizplus · Accepted Answer

The amount transferred to Finished Goods is calculated by multiplying the number of completed units by the total cost per unit (direct materials + conversion costs). For 20,000 units, the cost is 20,000 units * ($0.75 + $0.50) = $25,000.

Sullivan Company Uses Process Costing