The Martin Rubber Company produces tires. The following information is available for Martin:
Beginning work in process inventory: 2,000 tires, 100% complete for direct materials, 60% complete for conversion costs, cost of direct materials = $57,100, cost of direct labor and manufacturing overhead allocated = $19,020
Current period activity: 15,100 tires started into production ,12,600 tires completed, cost of direct materials added = $302,000, cost of direct labor and manufacturing overhead allocated = $232,980
Ending work in process inventory: 4,500 units, 100% complete for direct materials, 40% complete for conversion costs
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Assuming Martin uses the weighted-average method, what was the cost of goods completed and transferred out during the period?

Question

Quizplus · Accepted Answer

The cost of goods completed and transferred out during the period is $485,100. This is calculated by adding the cost of the beginning work in process inventory to the cost of the current period activity and then subtracting the cost of the ending work in process inventory. The cost of the beginning work in process inventory is $76,120 (direct materials: $57,100 + direct labor and manufacturing overhead: $19,020). The cost of the current period activity is $534,980 (direct materials: $302,000 + direct labor and manufacturing overhead: $232,980). The cost of the ending work in process inventory is $106,930 (direct materials: $45,000 + direct labor and manufacturing overhead: $61,930). Therefore, the cost of goods completed and transferred out during the period is $485,100 ($76,120 + $534,980 - $106,930).

The Martin Rubber Company Produces Tires