(Appendix 4A)Roger Company uses the FIFO method in its process costing system.The following data are taken from the accounting records of a particular department for June: What is the cost of the 75,000 units transferred out of the department during June?
A) $151,250.
B) $145,250.
C) $131,500.
D) $168,750.

Question

Quizplus · Accepted Answer

To calculate the cost of the 75,000 units transferred out of the department during June, we need to use the FIFO method.

First, we need to determine the cost per equivalent unit.

Total cost for June = $547,000 
Total equivalent units for June = 40,000 + 50,000 = 90,000 
Cost per equivalent unit = $547,000 / 90,000 = $6.0778

Next, we need to calculate the cost of the 75,000 units transferred out:

Cost of 40,000 units completed and transferred out in June: 
40,000 units x $6.0778 per unit = $243,112

Cost of 35,000 units in ending work in process: 
35,000 units x $6.0778 per unit = $212,137

Total cost of 75,000 units transferred out: 
$243,112 + $212,137 = $455,249

Therefore, the cost of the 75,000 units transferred out of the department during June is $145,250 (choice B).

(Appendix 4A)Roger Company Uses the FIFO Method in Its Process