Alberta Instrument Company uses a process costing system. A unit of product passes through three departments-moulding, assembly, and finishing-before it is completed. The following activity took place in the finishing department during May:
Work in process inventory, May 1 ............................. 1,900
Transferred in from the assembly department ............... 14,000
Transferred out to finished goods inventory Units .......... 11,900
Raw material is added at the beginning of processing in the finishing department. The work in process inventory was 70% complete in terms of conversion costs on May 1 and 40% complete in terms of conversion costs on May 31. Alberta Instrument Company uses the weighted-average method of process costing. The equivalent units and current period costs per equivalent unit of production for each cost factor are as follows for the finishing department
Equivalent ____Current Period Costs per Equivalent
Units _______________________Unit
Transferred-in-costs ........... 15,400 ........................ $ 6.00
Raw materials................... 15,400 ........................ 2.00
Conversion costs ............... 13,300 ........................ 4.00
Total .......................................................................... $12.00
Instructions
Calculate the following amounts:
(a) The cost of units transferred to finished goods inventory during May
(b) The cost of the finishing department's work in process inventory on May 31
(Adapted from CMA Canada, now CPA Canada)