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27 August, 22:01

In a department, 28,000 units are completed and transferred out and 14,400 remain in ending WIP at 85% complete. If an equivalent unit costs $8.00 for direct materials, what is the value of materials transferred out?

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  1. 27 August, 23:41
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    The value of materials transferred out is $224,000

    Explanation:

    The condition for the units for transferred is that they must have been completed 100% with respect to equivalent unit cost, hence the materials transferred out should be valued at full $8.00 per direct material.

    The value of materials transferred out=28,000*$8.00

    =$224,000

    The value of WIP=$8.00*85%*14,400

    =$97,920

    The closing WIP of $97920 would be the beginning inventory in production next period an would ultimately form part of materials completed and transferred next period.
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Home » Business » In a department, 28,000 units are completed and transferred out and 14,400 remain in ending WIP at 85% complete. If an equivalent unit costs $8.00 for direct materials, what is the value of materials transferred out?
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