Question

Tesla uses a weighted average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 700 units. The costs and percentage completion of these units in beginning inventory were Cost Percent Complete Materials costs $12,000 65% Conversion costs $2,000 10% A total of 9,200 units were started and 8,300 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs $200,800 Conversion costs $225,500 The ending inventory was 75% complete with respect to materials and 15% complete with respect to conversion costs. Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the last

Answer 1

Unit Information
Unit in beginning	700		Units transferred Out	8,300
Units transferred in during the period	9,200		EWIP	1,600
Total Units accounted for	9,900		Less opening WIP	(700)
			Units transferred in	9,200
			Equivalent units
Units Accounted For			Material-75%	Conversion-15%
Units in ending WIP	1,600		1,200	240
Units transferred out			8,300	8,300
Closing WIP			1,200	240
Total on all period including opening			9,500	8,540
Cost Information			Material	Conversion	Total
Cost of work in the process beginning			$                   12,000.00	$                2,000.00	$                14,000.00
Cost incurred during the period			$                 200,800.00	$           225,500.00	$              426,300.00
Total Cost to account for			$                 212,800.00	$           227,500.00	$              440,300.00
Total units			9,500	8,540
Cost per equivalent unit-Total cost/Total Units			$                           22.40	$                     26.64
Hence option C is the correct answer.