Kurtulus Corporation uses the weighted-average method in its process costing sys

Question

Kurtulus Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below:

The total cost transferred from the first processing department to the next processing department during the month is closest to:

Multiple Choice

$195,408

$186,108

$169,397

$211,098

Beginning work in process inventory: Units in beginning work in process inventory 1,400 Materials costs $ 7,800 Conversion costs $ 3,100 Percent complete with respect to materials 55 % Percent complete with respect to conversion 25 % Units started into production during the month 7,300 Units transferred to the next department during the month 6,500 Materials costs added during the month $ 110,900 Conversion costs added during the month $ 84,000 Ending work in process inventory: Units in ending work in process inventory 2,200 Percent complete with respect to materials 70 % Percent complete with respect to conversion 55 %

Explanation / Answer

The diiference of $ 2 may be due to rounding off diference.

Step-1:Calculation of equivalent units of production Materials Conversions Physical Units % of completion Equivalent units % of completion Equivalent units Units completed 6500 100% 6500 100% 6500 Units in Ending work in process 2200 70% 1540 55% 1210 Total 8700 8040 7710 Step-2:Calculation of cost per equivalent units of production Materials Conversion Beginning Work in process $          7,800 $         3,100 Costs incurred during the period $    1,10,900 $       84,000 Total costs $    1,18,700 $       87,100 / Equivalent units 8040 7710 Cost per equivalent unit $          14.76 $         11.30 Step-3:Calculation of cost of units transferred outr Equivalent units Cost per equivalent units Total Materials 6500 $       14.76 $             95,964 Conversions 6500 $       11.30 $             73,431 Total $          1,69,395 Thus, Total cost transferred is $ 1,69,395

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