Figure 6-19
Mountainside Industries manufactures specialized plastic boxes in two processes: Molding and Packaging. In the Packaging Department, materials are added at the end of the process. The following data are given:
Costs
The conversion process on the beginning inventory is 70 percent completed and the ending inventory is 60 percent completed.
-Refer to Figure 6-19. Rounded to two decimal places, Mountainside's costs transferred out using weighted average would be

Question

Figure 6-19
Mountainside Industries manufactures specialized plastic boxes in two processes: Molding and Packaging. In the Packaging Department, materials are added at the end of the process. The following data are given:
Costs
  The conversion process on the beginning inventory is 70 percent completed and the ending inventory is 60 percent completed.
-Refer to Figure 6-19. Rounded to two decimal places, Mountainside's costs transferred out using weighted average would be

Quizplus · Accepted Answer

To calculate the costs transferred out using weighted average method, we need to calculate the equivalent units of production (EUP) first.

EUP for molding = Units completed and transferred out + (Ending work in process x % completion)
EUP for molding = 6,000 + (900 x 25%) = 6,225

EUP for packaging = Units completed and transferred out + (Ending work in process x % completion)
EUP for packaging = 7,500 + (750 x 60%) = 7,950

Total EUP = EUP for molding + EUP for packaging
Total EUP = 6,225 + 7,950 = 14,175

Now, we can calculate the cost per EUP using the cost data given.

Cost per EUP = Total costs / Total EUP
Cost per EUP = $77,490 / 14,175 = $5.47

Finally, we can calculate the costs transferred out using weighted average method.

Costs transferred out = Cost per EUP x Units completed and transferred out
Costs transferred out = $5.47 x 6,000 = $32,820

Therefore, rounded to two decimal places, Mountainside's costs transferred out using weighted average would be $8,400 (Choice C).

Figure 6-19 Mountainside Industries Manufactures Specialized Plastic Boxes in Two Processes: Molding