Question

Eclypso Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department.

Information for the mixing department for October is as follows:

Work in process, October 1:

No. of units (45% complete) 7,200

Direct materials $42,000 Direct labor $50,400

Overhead $14,400

During October, 38,400 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during October:

Direct materials $144,000

Direct labor $192,000

Overhead $ 60,000

By October 31, 3,600 units that were 85% complete remained in the mixing department. Eclypso uses the weighted average method. Which of the following would be Eclypso's cost of goods that was transferred to the molding department during October? (Note: Round your calculation to two decimal places and the final answer to the nearest whole dollar.)

a.$261,050 b.$465,792 c.$310,347 d.$294,000

Answer 1

B. $465,792

STATEMENT OF EQUIVALENT PRODUCTION UNITS
Particulars	Input Unit	Particulars	Output Unit	Equivalent Production Unit
Material	Labour	Overhead
%	Equivalent UnitS	%	Equivalent UnitS	%	Equivalent UnitS
Opening WIP	7,200	Unit Completed	38,400	100	38,400	100	38,400	100	38,400
Unit Introduced	34,800	Closing WIP	3,600	85	3,060	85	3,060	85	3,060
	42,000		42,000		41,460		41,460		41,460

Cost Statement

Particulars	Material	labour	Overhead
Opening Stock	42,000	50,400	14,400
Cost during the period	1,44,000	1,92,000	60,000
Total Cost	1,86,000	2,42,400	74,400
Equivalent Unit
Material Transfer to next process	38400	38400	38400
Closing WIP	3060	3060	3060
Total Equivalent Unit	41460	41460	41460
Cost per unit
Cost per unit	4.49	5.85	1.79
Cost of material transfer	1,72,416	2,24,640	68,736

cost per unit is calculated by dividing total cost by total equivalent, which will give the total cost per unit is $ 12.13, which need to mutliply with total unit transfered to next process

=38400 units *$ 12.13=$ 465,792.