Sarver Corporation uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department's operations in March. The Fitting Department's cost per equivalent unit for conversion cost for March was $8.24. How much conversion cost was assigned to the units transferred out of the Fitting Department during March?
A)$482,287.20
B)$502,640.00
C)$523,240.00
D)$561,144.00

Question

Sarver Corporation uses the weighted-average method in its process costing system. The Fitting Department is the second department in its production process. The data below summarize the department's operations in March.  The Fitting Department's cost per equivalent unit for conversion cost for March was $8.24. How much conversion cost was assigned to the units transferred out of the Fitting Department during March?
A)$482,287.20 
B)$502,640.00 
C)$523,240.00 
D)$561,144.00

Quizplus · Accepted Answer

The total cost to be accounted for in the Fitting Department for March is:
Beginning work in process inventory: $48,600 
Costs added during March: $1,067,300 
Total cost to be accounted for: $1,115,900

To calculate the total units accounted for, we add the units started and completed to the ending work in process inventory:
Units in beginning work in process inventory: 10,300 
Units started and completed during March: 97,700 
Units in ending work in process inventory: 5,900 
Total units accounted for: 114,900

To calculate the conversion cost assigned to the units transferred out, we use the weighted-average cost per equivalent unit for conversion cost:
Conversion cost per equivalent unit: $8.24 
Conversion cost assigned to units transferred out: 
97,700 x $8.24 = $804,328

Therefore, the correct answer is:
C) $523,240.00

Sarver Corporation Uses the Weighted-Average Method in Its Process Costing