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 during May?

Question

Quizplus · Accepted Answer

The amount transferred to Finished Goods is calculated by multiplying the number of units completed by the sum of the equivalent cost per unit for direct materials and conversion costs. For 20,000 units completed, the calculation is 20,000 units * ($0.75 + $0.50) = 20,000 * $1.25 = $25,000.

Sullivan Company Uses Process Costing