Hendrix, Inc. employs a process costing system. Direct materials are added at the beginning of the process. Here is information about July's activities: On July 1: Beginning inventories = 750 units, 60% complete
Direct materials cost = $5,925
Conversion costs = $4,095
During July: 15,000 units started
Direct materials added = $150,000
Conversion costs added = $83,520
On July 31: Ending inventories = 1,500 units, 40% complete
Using the weighted average method, the cost of the goods completed and transferred out was:

Question

Quizplus · Accepted Answer

Weighted average cost per unit = [(5,925 + 150,000) / (750 + 15,000)] + [(4,095 + 83,520) / (750 + 15,000)] = $11.00 + $5.90 = $16.90Cost of goods completed and transferred out = 15,000 units * $16.90 = $253,500Less: Cost of ending inventory = 1,500 units * $16.90 * 40% = $10,340Cost of goods completed and transferred out = $253,500 - $10,340 = $243,160