trapp corporation uses the weighted - average method in its process costing system. the beginning work in…

trapp corporation uses the weighted - average method in its process costing system. the beginning work in process inventory in its painting department consisted of 3,000 units that were 70% complete with respect to materials and 60% complete with respect to conversion costs. the cost of the beginning work in process inventory in the department was recorded as $10,000. during the period, 9,000 units were completed and transferred on to the next department. the costs per equivalent unit for the period were $2.00 for material and $3.00 for conversion costs. what was the cost of units transferred out during the month? a) $45,000 b) $45,400 c) $35,400 d) $39,600

trapp corporation uses the weighted - average method in its process costing system. the beginning work in process inventory in its painting department consisted of 3,000 units that were 70% complete with respect to materials and 60% complete with respect to conversion costs. the cost of the beginning work in process inventory in the department was recorded as $10,000. during the period, 9,000 units were completed and transferred on to the next department. the costs per equivalent unit for the period were $2.00 for material and $3.00 for conversion costs. what was the cost of units transferred out during the month? a) $45,000 b) $45,400 c) $35,400 d) $39,600

Answer

Explanation:

Step1: Calculate cost per equivalent unit for total cost

The cost per equivalent unit for material is $2.00 and for conversion cost is $3.00. So the total cost per equivalent unit is $2.00 + $3.00=$5.00.

Step2: Calculate cost of units transferred out

The number of units transferred out is 9000. Using the formula (Cost = Number\ of\ units\times Total\ cost\ per\ equivalent\ unit), we have (9000\times5.00 = 45000). But we also need to add the cost of beginning work - in - process inventory. Wait, no. In the weighted - average method, the cost of beginning work - in - process is already included in the cost per equivalent unit calculation (implicitly). The correct formula for cost of units transferred out in weighted - average is (Cost=(Cost\ per\ equivalent\ unit\ of\ materials + Cost\ per\ equivalent\ unit\ of\ conversion)\times Units\ transferred\ out).

Another way: The cost of units transferred out is calculated as follows: The cost per equivalent unit for materials is $2 and for conversion is $3. The total cost per unit for a completed unit is (2 + 3=5) The number of units transferred out is 9000 The cost of units transferred out (=9000\times(2 + 3)=9000\times5 = 45000)

Answer:

A. $45,000