The following is partial information for the month of March for Macmillan International Inc., a two-department manufacturer that uses process costing:
Work in process, beginning (67% converted) ..................... 15,000 units
Costs of beginning work in process:
Transferred in from department A ................................... $ 9,500
Materials ................................................................. 0
Conversion ............................................................... 11,200
Units completed and transferred out during March ................ 45,000 units
Units transferred in during March from department A ............ ? units
Work in process, ending (37.5% converted) ....................... 16,000 units
Materials costs added during March ............................... $13,000
Conversion costs added during March ............................. $63,000
Other information:
1. Material is introduced at the beginning in department A and more material is added at the very end in department B.
2. Conversion costs are incurred evenly throughout both processes.
3. As the process in department A is completed, goods are immediately transferred to department B; as goods are completed in department B, they are transferred to finished goods.
4. Unit costs of production in department A in March were
Materials ........................... $0.55
Conversion ......................... 0.40
Total ............................... $0.95
5. The company uses the weighted-average method.
Instructions
(a) Calculate the cost of goods transferred out of department B in March.
(b) Calculate the cost of the March ending work in process inventory in department B.
(Adapted from CGA-Canada, now CPA Canada)