Scoria produces a product for which all direct materials are added at the beginn

Question

Scoria produces a product for which all direct materials are added at the beginning of the production process. The following is a review of Scoria's cost and inventory records for the recent year: Units Materials |Conversion WIP Jan 1st (80% complete with respect to Conversion costs Units started into production Cost added during the year: 125,000 $145,000$182,500 600,000 Materials Conversion Units Completed during the year $580,000 $1,043,000 525,000 In its process costing system, Scoria is using the weighted-average cost method. Ending inventory for the year is 60% complete with respect to conversion costs. What amount of cost was transferred to finish goods inventory'? A. $1,290,000 B.$1,522,500 C. $1,350,000 D. $997,500 E. None of the above

Explanation / Answer

Materials Conversion Units completed 525000 525000 Ending work in process 200000 120000 Equivalent units 725000 645000 Total costs 725000 1225500 Cost per Equivalent unit 1 1.9 Cost transferred to finsihed goods inventory=525000*(1+1.9)= $1522500 Option B is correct

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