Valley Manufacturing Company's beginning work in process inventory consisted of 10,000 units, 100% complete with respect to materials cost and 40% complete with respect to conversion costs. The total cost in the beginning inventory was $30,000. During the month, 50,000 units were transferred out. The equivalent unit cost was computed to be $2.00 for materials and $3.70 for conversion costs under the
Weighted-average method. Given this information, the total cost of the units completed and transferred out was?

Question

Quizplus · Accepted Answer

The total cost of units completed and transferred out can be calculated by adding the cost of beginning work in process inventory to the cost of work done during the period. The beginning inventory cost is $30,000. For the 50,000 units transferred out, the cost is calculated using the equivalent unit costs for materials and conversion costs. Since the equivalent unit costs are $2.00 for materials and $3.70 for conversion costs, the total cost per unit is $5.70 ($2.00 + $3.70). Therefore, the cost for the 50,000 units is 50,000 units * $5.70 = $285,000. Adding the beginning inventory cost, we get $285,000 (since the beginning inventory cost is already included in the calculation under the weighted-average method, we don't add it again). Therefore, the correct answer is $285,000.

Valley Manufacturing Company's Beginning Work in Process Inventory Consisted of 10,000