The ledger of American Company has the following work in pro

The ledger of American Company has the following work in process account.

Work in Process—Painting

Production records show that there were 420 units in the beginning inventory, 30% complete, 1,680 units started, and 1,530 units transferred out. The beginning work in process had materials cost of $2,440 and conversion costs of $1,250. The units in ending inventory were 40% complete. Materials are entered at the beginning of the painting process.

What is the total cost of units transferred out in May? (Round answer to 0 decimal places, e.g. 1,225.)

Work in Process—Painting
5/1	Balance	3,690	5/31	Transferred out	?
5/31	Materials	7,070
5/31	Labor	3,230
5/31	Overhead	1,680
5/31	Balance	?

Solution

Work in process, May 31 = 420+1680-1530= 570 Equivalent units for materials = 1530+570= 2100 The unit materials cost for May =(7070+2440)/2100= 4.529 Equivalent units for conversion = 1530+(570*40%)= 1758 The unit materials cost for May =(3230+1680+1250)/1758= 3.504 The total cost of units transferred out in May=1530*(4.529+3.504)= 12290