Question

California Company manufactures greeting cards. Special glittery material is added at the end of the process in the Printing Department. Conversion costs are applied uniformly throughout the process. The weighted-average method of process costing is used. Data for the Printing Department for the month of September follow:

Work-In-Process Inventory, September 1: Units 22,500 Direct materials (0% complete) $0 Conversion costs (30% complete) $20,472 Units started in September 127,500 Units completed in September 123,000 Work-In-Process Inventory, September 30 27,000 Direct materials added in September $492,000 Conversion costs added in September $315,000 With regard to the Work-In-Process Inventory on September 30, materials are 0 percent complete and conversion costs are 60 percent complete. The total cost of goods transferred out of the Printing Department is ________.

Answer 1

Answer: The total cost of goods transferred out of the Printing Department is $ 788,430.

Statement of Equivalent Production :

Inputs ( Units )	Output	Units	Equivalent Production
			Materials		Conversion Costs
150,000			%	Units	%	Units
	Completed and Transferred Out	123,000	100	123,000	100	123,000
	Ending WIP	27,000	0	0	60	16,200
		150,000		123,000		139,200

Statement of Cost:

	Materials	Conversion Costs
Cost of Beginning WIP	$ 0	$ 20,472
Costs incurred in September	492,000	315,000
Total Cost	$ 492,000	$ 335,472
Equivalent units	123,000	139,200
Cost per unit	$ 4.00	$ 2.41

Cost of goods transferred out of printing department is 123,000 x $ ( 4.00 + 2.41) = $ 788,430