The Mixing Department of Premium Foods had 50,000 equivalent units of materials for October. Of the 50,000 units, 25,000 units were completed and transferred to the next department, and 25,000 units were 35% complete. Premium Foods's costs per equivalent unit of production are $0.96 for direct materials and $0.70 for conversion costs. All of the materials are added at the beginning of the process. Conversion costs are added evenly throughout the process and the company uses the weighted-average method. Calculate the cost of the 25,000 units completed and transferred out and the 25,000 units, 35% complete, in the ending Work-in-Process Inventory.

Explanation:

The computation of the cost of 25,000 units completed and transferred out is shown below;

                                           ( in $)

Costs               Direct materials       Conversion costs         Total costs

Cost accounted for    

completed

and transferred

out                        24,000                          17,500                            41,500

                      (25,000 × $0.96)                (25,000 × $0.70)

Ending

work in

process                 24,000                           6,125                              30,125

                    (25,000 × $0.96)        (25,000 × $0.96 × 35%)                          

 Total cost

accounted for       48,000                           23,625                            71,625

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