Bettie Corporation uses a weighted-average process costing system to collect costs related to production. The following selected information relates to production for October: All materials at Bettie are added at the beginning of the production process.What total amount of cost should be assigned to the units completed and transferred out during October?

Question

Bettie Corporation uses a weighted-average process costing system to collect costs related to production. The following selected information relates to production for October:  All materials at Bettie are added at the beginning of the production process.What total amount of cost should be assigned to the units completed and transferred out during October?

Quizplus · Accepted Answer

The total cost assigned to the units completed and transferred out is the total cost incurred during the period, minus the cost of ending work in process inventory. 
Total cost incurred during October: 
Beginning Work in Process Inventory = $81,000 
Direct materials added in October = $411,000 
Direct labor incurred in October = $126,000 
Manufacturing overhead incurred in October = $72,000 
Total cost incurred during October = $690,000

Cost of ending work in process inventory: 
Materials cost = (15,000 x $28) - (5,000 x $28) = $280,000 
Conversion cost = (15,000 x $22) - (2,000 x $22) = $308,000 
Total cost of ending work in process inventory = $588,000

Therefore, the total amount of cost assigned to the units completed and transferred out during October is: 
$690,000 - $588,000 = $102,000 
Since 15,000 units were completed and transferred out during October, the cost per unit is: 
$102,000 ÷ 15,000 = $6.80 
Thus, the correct choice is C, $690,000.

Bettie Corporation Uses a Weighted-Average Process Costing System to Collect