Pilot Protectors manufactures pocket knives in three processes and uses process costing.All materials are added at the start of the Forming Department process.The following information is available for March production for the Forming Department: $\begin{array}{lr}
\text { Beginning Work in Process (20\% complete) } & 2,000 \
\text { Plus: Units started } & 34,000\\text { Units to account for } & 36,000 \
\text { Less: Ending Work in Process ( } 70 \% \text { complete) } & 4,000\\text { Units completed }&32,000
\end{array}$
$\text { The following costs are available for March : }$

$\begin{array}{lrrrr}&\text { Material }&\text { Conversion Cost }&\text { Total Cost }\
\text { Beginning Work in Process }& \$ 11,800 & \$ 22,500 & \$ 34,300 \
\text { Current cost } & 65,600 & 64,500 & 130,100\
\text { Total cost }&\$77,400&\$87,000&\$164,400
\end{array}$ What is the cost of goods transferred to the next processing department during March?

Question

Pilot Protectors manufactures pocket knives in three processes and uses process costing.All materials are added at the start of the Forming Department process.The following information is available for March production for the Forming Department: $\begin{array}{lr}
\text { Beginning Work in Process (20\% complete) } & 2,000 \
\text { Plus: Units started } & 34,000\\text { Units to account for } & 36,000 \
\text { Less: Ending Work in Process ( } 70 \% \text { complete) } & 4,000\\text { Units completed }&32,000
\end{array}$
$\text { The following costs are available for March : }$

$\begin{array}{lrrrr}&\text { Material }&\text { Conversion Cost }&\text { Total Cost }\
\text { Beginning Work in Process }& \$ 11,800 & \$ 22,500 & \$ 34,300 \
\text { Current cost } & 65,600 & 64,500 & 130,100\
\text { Total cost }&\$77,400&\$87,000&\$164,400
\end{array}$ What is the cost of goods transferred to the next processing department during March?

Quizplus · Accepted Answer

The cost of goods transferred to the next processing department includes the costs from the beginning work in process and the costs added during the current period for the units that were completed. The total cost to account for is $164,400. Since the ending work in process inventory is not transferred, we subtract its cost to find the cost of goods transferred. Given the total cost and the information provided, the cost of goods transferred is $148,800, which is calculated by subtracting the cost associated with the ending work in process from the total cost.

Pilot Protectors Manufactures Pocket Knives in Three Processes and Uses