Question

The Kim Company is a furniture manufacturer with two departments: molding and finishing. The company uses the weighted-average method of process costing. In August, the following data were recorded for the finishing department:

Units of beginning work in process inventory	12,500
Units transfered in during August	87,500
Units completed	62,500
Transferred-in costs in beginning WIP	$103,625
Cost of units transferred in during current period	$809,375

There were no spoiled or lost units. The firm had completed 24% of the work for the units in ending WIP.

Required: Compute the transferred-in costs contained in the cost of goods manufactured in August.

Answer 1

Correct answer-------------$ 798,077 or $ 798,076.92

Working

Reconciliation of Units
A	Beginning WIP	12,500
B	Introduced	87,500
C=A+B	TOTAL	100,000
D	Transferred out	62,500
E=C-D	Ending WIP	37,500

.

Statement of Equivalent Units(Weighted average)
				Transferred in
	Units			Complete %	Equivalent units
Transferred out	62,500			100%	62,500
Ending WIP	37,500			24%	9,000
Total	100,000			Total	71,500

.

Cost per Equivalent Units (Weighted average)
COST		Transferred in
Beginning WIP Inventory Cost (A)		$ 103,625
Cost incurred during period (B)		$ 809,375
Total Cost to be accounted for (C=A+B)		$ 913,000
Total Equivalent Units(D)		71,500
Cost per Equivalent Units (E=C/D)		$ 12.77

.

.

Statement of cost (Weighted average)
Cost	Equivalent Cost/unit			Transferred
				Units	Cost Allocated
Transfferd	$ 12.77			62,500	$        798,076.92
TOTAL	$ 913,000			TOTAL	$ 798,077