Brooks Corporation has two sequential processing departments: Assembly then Shaping.The Shaping Department reports the following information.Conversion costs are applied evenly throughout the process. $\begin{array}{|l|r|}
\hline \text { Beginning WIP inventory } & 6,000 \text { units } \
\hline \text { Transferred-in costs in beginning WIP inventory } & \$ 108,000 \
\hline \text { Direct materials cost in beginning WIP inventory } & \$ 26,500 \
\hline \text { Conversion costs in beginning WIP inventory } & \$ 20,750 \
\hline \text { Units transferred-in } & 55,000 \text { units } \
\hline \text { Transferred-in costs } & \$ 530,000 \
\hline \text { Units completed } & \$ 0,000 \
\hline \text { Costs added: direct materials } & \$ 163,500 \
\hline \text { Costs added: conversion costs } & 11,000 \text { units } \
\hline \text { Ending WIP inventory } & \
\hline \begin{array}{l}
\text { (50\% complete for materials and } 40 \% \text { complete for } \
\text { conversion) }
\end{array} & \
\hline
\end{array}$

- The total cost of units transferred to finished goods would be closest to:

Question

Brooks Corporation has two sequential processing departments: Assembly then Shaping.The Shaping Department reports the following information.Conversion costs are applied evenly throughout the process. $\begin{array}{|l|r|}
\hline \text { Beginning WIP inventory } & 6,000 \text { units } \
\hline \text { Transferred-in costs in beginning WIP inventory } & \$ 108,000 \
\hline \text { Direct materials cost in beginning WIP inventory } & \$ 26,500 \
\hline \text { Conversion costs in beginning WIP inventory } & \$ 20,750 \
\hline \text { Units transferred-in } & 55,000 \text { units } \
\hline \text { Transferred-in costs } & \$ 530,000 \
\hline \text { Units completed } & \$ 0,000 \
\hline \text { Costs added: direct materials } & \$ 163,500 \
\hline \text { Costs added: conversion costs } & 11,000 \text { units } \
\hline \text { Ending WIP inventory } & \
\hline \begin{array}{l}
\text { (50\% complete for materials and } 40 \% \text { complete for } \
\text { conversion) }
\end{array} & \
\hline
\end{array}$

- The total cost of units transferred to finished goods would be closest to:

Quizplus · Accepted Answer

To calculate the total cost of units transferred to finished goods, we need to calculate the total cost incurred for all the units completed and transferred from the Shaping Department.

Using the information given in the table, we can calculate the total cost incurred for each unit as follows:

Total cost per unit = Direct materials + Direct labor + Overhead
Total cost per unit = $320 + $216 + $240
Total cost per unit = $776

We can then use the total units started and the total units ending inventory to calculate the total units completed and transferred to finished goods as follows:

Total units completed and transferred = Total units started - Total units ending inventory
Total units completed and transferred = 12,500 - 2,000
Total units completed and transferred = 10,500

Finally, we can calculate the total cost of units transferred to finished goods as follows:

Total cost of units transferred to finished goods = Total cost per unit x Total units completed and transferred
Total cost of units transferred to finished goods = $776 x 10,500
Total cost of units transferred to finished goods = $8,148,000

Therefore, the closest answer is C) $920,271.

Brooks Corporation Has Two Sequential Processing Departments: Assembly Then Shaping