Question

Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were:

	Cost				Percent Complete
Materials costs	$	10,600				65%
Conversion costs	$	12,800				30%

A total of 8,500 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

	Cost
Materials costs	$	142,100
Conversion costs	$	359,500

The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs.

The total cost transferred from the first processing department to the next processing department during the month is closest to: (Do not round intermediate calculations.)

Multiple Choice

• $476,929

• $525,000

• $599,376

• $501,600

Answer 1

• Correct Answer = Option #1: $ 476,929

Cost of Units Transferred Out	EUP [see working]	Cost per EUP [see working]	Total Cost
- Direct Materials	7,400	$                    18.29	$        135,346.00
- Conversion	7,400	$                    46.16	$        341,584.00
Total Cost transferred Out				$            476,930.00

• Working

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	7,400	100%	7,400	100%	7,400
Units of ENDING WIP	1,900	50%	950	35%	665
Equivalent Units of Production			8,350		8,065
COST per EUP			Material		Conversion
Cost of Beginning WIP			$          10,600.00		$                                  12,800.00
Cost incurred during the period			$        142,100.00		$                                359,500.00
Total Costs		Costs	$        152,700.00	Costs	$                                372,300.00
Equivalent units of production		EUP	8,350	EUP	8,065
Cost per EUP			$            18.29		$                                   46.16