MegaRock produces quick setting concrete mix. Production of 200,000 tons was started in April, 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70% complete. What is the cost of the product that was completed and transferred to finished goods?

a.) $3,610,000.

b.) $3,555,850.

c.) $2,994,400.

d.) $3,743,000.

Question

Business

Sherlyn Wells

26 November, 15:27

MegaRock produces quick setting concrete mix. Production of 200,000 tons was started in April, 190,000 tons were completed. Material costs were $3,152,000 for the month while conversion costs were $591,000. There was no beginning work-in-process; the ending work-in-process was 70% complete. What is the cost of the product that was completed and transferred to finished goods?

a.) $3,610,000.

b.) $3,555,850.

c.) $2,994,400.

d.) $3,743,000.

+4

Answers (1)

Know the Answer?

Kolby Best · Answer 1

A. $3,610,000

Explanation:

The Equivalent production = 190,000 + [70% * (200,000 - 190,000) ] = 197,000 tons.

While the Cost per unit = ($3,152,000 + $591,000) / 197,000 = $19;

the transferred costs = 190,000 * $19 = $3,610,000

= $3,610,000 which is the final answer.