Zebra Company manufactures Product Z in a two-stage production cycle in Departments A and B....
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Accounting
Zebra 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. Zebra uses the weighted-average method. Conversion costs for Department B were 40% complete as to the 24,000 units in the beginning work-in-process (WIP) inventory and 50% complete as to the 33,600 units in the ending work-in-process inventory. 48,000 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:
$ 48,000
$ 14,400
$ 4,800
Costs added in October
115,200
26,400
21,120
The total cost per equivalent unit transferred-out for October of Product Z, rounded to the nearest penny, was:
Multiple Choice
$2.75.
$2.95.
$2.90.
$2.80.
$2.85.
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