O'Leary Company manufactures Product Z in a two-stage production cycle in Departments A and B....
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Accounting
O'Leary Company manufactures Product Z in a two-stage production cycle in Departments A and B. Materials are added at the beginning of the process in Department B. O'Leary uses the weighted-average method. Conversion costs for Department B were 40% complete as to the 5,000 units in the beginning work-in-process (WIP) inventory and 50% complete as to the 7,000 units in the ending work-in-process inventory. 10,000 units were completed and transferred out of Department B during October. An analysis of the costs relating to work-in-process inventories and production activity in Department B for October follows:
Transferred- in Costs
Materials Costs
Conversion Costs
WIP, October 1:
$
10,000
$
3,000
$
1,000
Costs added in October
24,000
5,500
4,400
The total cost per equivalent unit transferred-out for October of Product Z, rounded to the nearest penny, was:
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