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Materials costs of $300,000 and conversion costs of $214,200 were charged to a processing department in the month of September.Materials are added at the beginning of the process; conversion costs are incurred uniformly throughout the process.There were no units in beginning Work in Process, 100,000 units were started into production in September, and there were 8,000 units in ending Work in Process that were 40% complete at the end of September.
-What was the total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September if the weighted-average method is used?
A)$184,000
B)$483,000
C)$414,200
D)$195,200

Question

Use the following information to answer questions 
Materials costs of $300,000 and conversion costs of $214,200 were charged to a processing department in the month of September.Materials are added at the beginning of the process; conversion costs are incurred uniformly throughout the process.There were no units in beginning Work in Process, 100,000 units were started into production in September, and there were 8,000 units in ending Work in Process that were 40% complete at the end of September.
-What was the total amount of manufacturing costs assigned to those units that were completed and transferred out of the process in September if the weighted-average method is used?
A)$184,000
B)$483,000
C)$414,200
D)$195,200

Quizplus · Accepted Answer

Using the weighted-average method, the equivalent units of production for materials and conversion costs would be calculated as follows:
Materials:
100,000 units started + 8,000 units in ending WIP (40% complete) = 104,000 units
Conversion:
100,000 units started + 8,000 units in ending WIP (40% complete) = 104,000 units
Materials cost per equivalent unit = $300,000 ÷ 104,000 units = $2.885 per unit
Conversion cost per equivalent unit = $214,200 ÷ 104,000 units = $2.0596 per unit
Total manufacturing cost per equivalent unit = $2.885 + $2.0596 = $4.9446 per unit
Total manufacturing cost assigned to completed and transferred out units = 100,000 units completed and transferred out x $4.9446 = $494,460
However, we need to adjust for the 8,000 units in ending WIP that were 40% complete, which would be the equivalent of 3,200 completed units (8,000 units x 40%). Therefore, the adjusted total manufacturing cost assigned to completed and transferred out units would be:
Adjusted total manufacturing cost = $494,460 - ($2.885 x 3,200 units) - ($2.0596 x 3,200 units) = $483,005.6, which rounded to the nearest thousand is $483,000.

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