Sandisk Corp. produces a product for which all direct materials are added at the beginning of the production process.

Question

Sandisk Corp. produces a product for which all direct materials are added at the beginning of the production process. The following is a review of Sandisk's cost and inventory records for the recent year: Units Materials Conversion WIP Jan 1st (80% complete with respect to Conversion costs) 125,000 $145,000 $182,500 Units started into production 600,000 Cost added during the year: Materials $580,000 Conversion $1,043,000 Units Completed during the year 525,000 In its process costing system, Sandisk is using the weighted-average cost method. Ending inventory for the year is 60% complete with respect to conversion costs. What amount of cost was transferred to finish goods inventory? A. $1,290,000 B. $1,522,500 C. $1,350,000 D. $997,500 E. None of the above

Help In Homework · Accepted Answer

Computation of Amount of Cost transferred to Finished Goods Inventory: Materials Conversion Units completed 525000 525000 Ending work in process 200000 120000 Equivalent units 725000 645000 Total costs 725000 1225500 Cost per Equivalent unit 1 1.9 Cost transferred to finsihed goods inventory=525000*(1+1.9)= $1522500 So, the correct option is B "$1,522,500".

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Computation of Amount of Cost transferred to Finished Goods Inventory:
	Materials	Conversion
Units completed	525000	525000
Ending work in process	200000	120000
Equivalent units	725000	645000
Total costs	725000	1225500
Cost per Equivalent unit	1	1.9

*Cost transferred to finsihed goods inventory=525000(1+1.9)= $1522500**