Rawlings, Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the Mixing Department. Information for the Mixing Department for January follows: $\begin{array}{lr}
\text { Work in process, January } 1: & \
\text { Units (35\% complete) } & 7,500 \
\text { Direct materials } & \$ 36,000 \
\text { Direct labor } & \$ 45,000 \
\text { Overhead } & \$ 15,000
\end{array}$ During January, 26,750 units were completed and transferred to the Molding Department. The following costs were incurred by the Mixing Department during January: $\begin{array}{lr}
\text { Direct materials } & \$ 133,050 \
\text { Direct lab or } & 180,000 \
\text { Overhead (applied) } & 45,000
\end{array}$
There were 3,750 units that were 80 percent complete remaining in Mixing at January 31. The cost of goods transferred to the Molding Department during January using the FIFO method is
A)$414,450.
B)$391,575.
C)$323,400.
D)none of the above.

Question

Quizplus · Accepted Answer

The FIFO method considers only the costs incurred during the current period for the units completed and transferred out. The cost of goods transferred includes the cost to complete the beginning inventory and the cost of units started and completed during the period.

Rawlings, Inc During January, 26,750 Units Were Completed and Transferred to the Mixing