Tarten Corporation 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

Tarten Corporation 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 units completed and transferred out of the department, we need to calculate the equivalent units of production for both materials and conversion costs.

The equivalent units of production for conversion costs are as follows:

Beginning WIP inventory: 3,000 * 90% = 2,700 units
Current production: 44,000 - 3,000 + 2,000 = 43,000
Total: 45,700

The total conversion cost for the department for March is:

($8.20 per equivalent unit) * (45,700 equivalent units) = $374,140

To calculate the conversion cost assigned to units completed and transferred out of the department, we need to subtract the conversion cost in the ending work-in-process inventory from the total conversion cost for the department:

$374,140 - ($7,900 * 30% * 6,000) = $533,090

Therefore, the answer is C.

Tarten Corporation Uses the FIFO Method in Its Process Costing