Question

Pacific Ink had beginning work-in-process inventory of $762,960 on October 1. Of this amount, $313,920 was the cost of direct materials and $449,040 was the cost of conversion. The 57,000 units in the beginning inventory were 25 percent complete with respect to both direct materials and conversion costs. During October, 120,000 units were transferred out and 39,000 remained in ending inventory. The units in ending inventory were 75 percent complete with respect to direct materials and 35 percent complete with respect to conversion costs. Costs incurred during the period amounted to $2,956,500 for direct materials and $3,737,220 for conversion. 1.value: 20.00 pointsRequired information Compute the costs of goods transferred out and the ending inventory using the weighted-average method.

Answer 1

Answer:

Cost of goods transferred =$6,388,147.07

Cost of ending inventory=$1,068,478.93  

Explanation:

Equivalent unit of material = (120,000× 100%)+(39,000×75%)=149250

Cost per unit of material = Total cost /Total equivalent unit

=(313,920 +2,956,500)/149250 =21.912

Cost per conversion cost

Equivalent unit of conversion cost

= (120,000 × 100%) + ((39,000×35%)= 133,650

Cost per unit of conversion cost

= ($3,737,220 + $449,040)/133,650  = 31.322

Cost of goods transferred = 120,000× (21.912 + 31.322)= 6,388,147.07  

Cost of Inventory = (75%*39,000×21.912)+(35%× 39,000×31.322)

                             = 1,068,478.93  

Cost of goods transferred =$6,388,147.07

Cost of ending inventory=$1,068,478.93  

=