Zuniga, Inc. uses a process costing system. During May, 1,200 units were transferred into Department 2 at a cost of $38,040. Direct materials are added at the beginning of the process. Additionally: On May 1: Beginning inventories $ =250 $ units, $ 40 \% $ complete
Direct materials costs $ =\$ 1,250 $
Conversion costs $ =\$ 1,356 $
Transferred-in costs $ =\$ 2,560 $

During May: Direct materials costs incurred $ =\$ 6,000 $ Conversion costs incurred $ =\$ 17,013 $

On May 31: Ending Inventories $ =350 $ units, $ 20 \% $ complete Using the weighted average method, the cost of the units transferred out was:
A) $53,570
B) $44,710
C) $52,261
D) $66,219

Question

Zuniga, Inc. uses a process costing system. During May, 1,200 units were transferred into Department 2 at a cost of $38,040. Direct materials are added at the beginning of the process. Additionally: On May 1: Beginning inventories $ =250 $ units, $ 40 \% $ complete
Direct materials costs $ =\$ 1,250 $
Conversion costs $ =\$ 1,356 $
Transferred-in costs $ =\$ 2,560 $

During May: Direct materials costs incurred $ =\$ 6,000 $ Conversion costs incurred $ =\$ 17,013 $

On May 31: Ending Inventories $ =350 $ units, $ 20 \% $ complete Using the weighted average method, the cost of the units transferred out was:
A) $53,570
B) $44,710
C) $52,261
D) $66,219

Quizplus · Accepted Answer

The weighted average method assigns costs to units based on the average cost of all units in the process during the period. The average cost is calculated by dividing the total costs incurred during the period by the total equivalent units produced during the period. In this case, the total costs incurred during May are $38,040 (transferred-in costs) + $6,000 (direct materials costs) + $17,013 (conversion costs) = $61,053. The total equivalent units produced during May are 1,200 units (transferred in) + 250 units (beginning inventory) x 40% (percent complete) + 350 units (ending inventory) x 20% (percent complete) = 1,550 units. Therefore, the average cost per unit is $61,053 / 1,550 units = $39.39. The cost of the units transferred out is 1,200 units x $39.39 = $47,268.

Zuniga, Inc =250 =250 =250 Units 40% 40 \% 40% Complete Direct Materials Costs

Zuniga, Inc $=250$ Units $40 \%$ Complete
Direct Materials Costs