Answer:
$174,781.20
Explanation:
I will do the calculations in 3 stages. You won`t go wrong if you follow these.
- Equivalent Units
- Total Unit Cost
- Total Cost to be transferred to next department
<u>Calculation of Equivalent Units of Production with respect to Raw Materials and Conversion Costs</u>
1. Raw Materials
Ending Work In Process Inventory (2,300 × 70 %) = 1,610
Completed and Transferred to Finished Goods (6,600 × 100%) = 6,600
Equivalent Units of Production with respect to Raw Materials = 8,210
2. Conversion Costs
Ending Work In Process Inventory (2,300 × 55 %) = 1,265
Completed and Transferred to Finished Goods (6,600 × 100%) = 6,600
Equivalent Units of Production with respect to Conversion Costs = 7,865
<u>Calculation of Total Unit Cost of Production with respect to Raw Materials and Conversion Costs.</u>
Unit Cost = Total Cost (Beginning + Current) ÷ Total Equivalent Units
1. Materials
Unit Cost = ( $ 7,900 + $ 111,000) ÷ 8,210
= $14.482 (3 decimal places)
2. Conversion Cost
Unit Cost = ( $ 3,200 + $ 84,100) ÷ 7,865
= $12.00 (3 decimal places)
3. Total Unit Cost
Total Unit Cost = Materials + Conversion Costs
= $14.482 + $12.00
= $ 26.482
<u>Calculation of total cost of units completed and transferred from the first processing department to the next processing department</u>
Total Cost = Units Completed and Transferred × Total Unit Cost
= 6,600 × $ 26.482
= $174,781.20
