The following information is available for Department C for the month of June: $\begin{array}{lr}&\text { Units }& \text { Cost }\
\text { Work in process, June } 1 \text { (70\% complete) } & 10,000\
\text { Direct materials } && \$ 36,000 \
\text { Direct labor } && 18,000 \
\text { Manufacturing overhead } && 24.000\
\text {Total work in process, June 1 }&&\$78,000\
\text {Started in production during June }&40,000\
\text { Costs added: } & \
\text { Direct materials } && \$ 108,000 \
\text { Direct labor } && 48,000 \
\text { Manufacturing overhead } && 60,600\
\text { Total costs added during June }&&\$216,600\
\text { Work in process, June } 30 \text { (80\% complete })&4,000
\end{array}$
Materials are added at the beginning of the process. Round unit costs to two decimal places.
The cost of goods transferred out using the weighted average method is
A)$273,600.
B)$241,500.
C)$273,240.
D)none of the above.

Question

The following information is available for Department C for the month of June: $\begin{array}{lr}&\text { Units }& \text { Cost }\
\text { Work in process, June } 1 \text { (70\% complete) } & 10,000\
\text { Direct materials } && \$ 36,000 \
\text { Direct labor } && 18,000 \
\text { Manufacturing overhead } && 24.000\
 \text {Total work in process, June 1 }&&\$78,000\
 \text {Started in production during June }&40,000\
\text { Costs added: } & \
\text { Direct materials } && \$ 108,000 \
\text { Direct labor } && 48,000 \
\text { Manufacturing overhead } && 60,600\
\text { Total costs added during June }&&\$216,600\
\text { Work in process, June } 30 \text { (80\% complete })&4,000
\end{array}$
Materials are added at the beginning of the process. Round unit costs to two decimal places.
The cost of goods transferred out using the weighted average method is
A)$273,600.
B)$241,500.
C)$273,240.
D)none of the above.

Quizplus · Accepted Answer

To calculate the cost of goods transferred out using the weighted average method, first, we need to find the total costs and equivalent units. The total costs include the beginning work in process and the costs added during June, which sum up to $78,000 + $216,600 = $294,600. To find the equivalent units, we consider the completion percentages for the beginning inventory, production added, and ending inventory. The beginning inventory is already 70% complete, so it needs 30% more work to complete. The units started and completed during June are 40,000 units started minus 4,000 units ending inventory, equaling 36,000 units completed. The ending inventory is 80% complete. The equivalent units for work done in June are calculated by adding the work needed to complete the beginning inventory (10,000 units * 30%) to the units fully completed (36,000 units) and the work done on the ending inventory (4,000 units * 80%). The cost per equivalent unit is then calculated by dividing the total costs by the equivalent units. Finally, the cost of goods transferred out is found by multiplying the cost per equivalent unit by the equivalent units related to goods transferred out. The calculation specifics are omitted, but following this approach with the given data leads to the correct answer, which is the cost of goods transferred out using the weighted average method.

The Following Information Is Available for Department C for the Month