During the current period, Department A finished and transferred 50,000 units to

Question

During the current period, Department A finished and transferred 50,000 units to Department B. Of the 50,000 units, 20,000 were 1/5 complete at the beginning of the period and 30,000 were started and completed during the period. Also during the period, 10,000 units were started but brought only to a stage of being 3/5 completed. If the Weighted Average method is used and $14,000 of overhead was charged to Department A during the period, how much overhead should be allocated to the ending goods in process inventory?

$1,615
$3,250
$2,600
$2,500
$1,500

Explanation / Answer

Overhead equivalent for Department A =20,000*4/5 +30,000 +10,000*3/5 =52000 units $14,000 of overhead was charged to make 52000 units 10000*3/5 would be allocated = ($14,000/52000)*10000*3/5 = $1,615

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