Vallin Manufacturing Corporation's beginning work in process inventory consisted of 8,000 units, 100% complete with respect to materials cost and 60% complete with respect to conversion costs. The total cost in the beginning inventory was $36,000. During the month, 40,000 units were transferred out. The equivalent unit cost was computed to be $2.50 for materials and $3.00 for conversion costs under the weighted-average method. Given this information, the total cost of the units completed and transferred out was:
A) $256,000
B) $185,600
C) $220,000
D) $184,000

Question

Quizplus · Accepted Answer

To determine the cost of units completed and transferred out, we need to calculate the equivalent units of production for both materials and conversion costs:

Equivalent Units of Materials = Units completed and transferred out + (Ending WIP x % Complete with respect to materials)
Equivalent Units of Materials = 40,000 + (0 x 100%)
Equivalent Units of Materials = 40,000

Equivalent Units of Conversion Costs = Units completed and transferred out + (Ending WIP x % Complete with respect to conversion costs)
Equivalent Units of Conversion Costs = 40,000 + (0 x 40%)
Equivalent Units of Conversion Costs = 40,000

Total Cost of Units Completed and Transferred Out = (Equivalent Units of Materials x Cost per Equivalent Unit of Materials) + (Equivalent Units of Conversion Costs x Cost per Equivalent Unit of Conversion Costs)
Total Cost of Units Completed and Transferred Out = (40,000 x $2.50) + (40,000 x $3.00)
Total Cost of Units Completed and Transferred Out = $220,000

Therefore, the correct answer is choice C, $220,000.

Vallin Manufacturing Corporation's Beginning Work in Process Inventory Consisted of 8,000