(Appendix 6A)Tarten Company uses the FIFO method in its process costing system.Operating data for the Curing Department for the month of March appear below:
According to the company's records,the conversion cost in beginning work-in-process inventory was $7,470 at the beginning of March.The cost per equivalent unit for conversion costs for March was $8.20.
How much conversion cost would be assigned to the units completed and transferred out of the department during March?
A) $525,530.
B) $592,040.
C) $533,090.
D) $533,000.

Question

(Appendix 6A)Tarten Company uses the FIFO method in its process costing system.Operating data for the Curing Department for the month of March appear below: 
According to the company's records,the conversion cost in beginning work-in-process inventory was $7,470 at the beginning of March.The cost per equivalent unit for conversion costs for March was $8.20.
How much conversion cost would be assigned to the units completed and transferred out of the department during March?
A) $525,530. 
B) $592,040. 
C) $533,090. 
D) $533,000.

Quizplus · Accepted Answer

To calculate the conversion cost assigned to the units completed and transferred out, we need to first calculate the equivalent units of production for the department. Using the FIFO method, the equivalent units of production for the department are as follows:

Units transferred out: 46,000
Ending work-in-process: 
Materials: 13,500 units x 100% = 13,500 equivalent units
Conversion: 13,500 units x 80% = 10,800 equivalent units

Total equivalent units of production: 46,000 + 13,500 + 10,800 = 70,300

We can now calculate the total conversion cost for the department for March:

Total conversion cost = (Total equivalent units of production x Cost per equivalent unit) + Conversion cost in beginning work-in-process inventory
Total conversion cost = (70,300 x $8.20) + $7,470
Total conversion cost = $576,660

Finally, we can calculate the conversion cost assigned to the units completed and transferred out:

Conversion cost assigned to units completed and transferred out = Units transferred out x Cost per equivalent unit for conversion costs
Conversion cost assigned to units completed and transferred out = 46,000 x $8.20
Conversion cost assigned to units completed and transferred out = $377,200

Therefore, the correct answer is C) $533,090.

(Appendix 6A)Tarten Company Uses the FIFO Method in Its Process