Use the information below to answer the following question(s).Hollywood North Magic, a cosmetic manufacturer, began operations in January.During the first month of operations, $60,000 was incurred for direct materials and $80,000 was incurred for conversion costs.During January, 30,000 litres of cosmetics were started and 6,000 litres were unfinished at the end of the month.Ending work-in-process was 45% completed.All inputs are added evenly throughout the production process.
-Bag Company had a beginning inventory of 4,000 bags with costs of $18,000 on January 1.The direct materials were complete and all overhead had been assigned; however, only 40 percent of direct manufacturing labour was added in the prior period.Another 20,000 units were started and completed during the current period.Bag Company uses FIFO process-costing and calculated equivalent unit costs as follows: materials, $8.00; labour, $9.00; and overhead, $5.00.What is the total cost of goods transferred out using the FIFO method?
A)$440,000
B)$468,000
C)$470,000
D)$491,600
E)$519,500

Question

Quizplus · Accepted Answer

The total cost of goods transferred out using the FIFO method is calculated by adding the costs of beginning inventory and the costs to complete the beginning inventory, plus the costs of the units started and completed during the period. The equivalent unit costs are used to calculate the costs for the units completed.

Use the Information Below to Answer the Following Question(s)