Tear Company Manufactures Generic Notebooks The Total Cost of Goods Transferred Out of the Printing

question 160

Multiple Choice

Tear Company manufactures generic notebooks. Material is introduced at the beginning of the process in the Printing department. Conversion costs are applied uniformly throughout the process. The weighted- average method of product costing is used. Data for the Printing department for the month of June follow: $$\begin{array}{l}\text { Work- in- process inventory, June } 1\\\begin{array} { l r } \text { Units } & 15,000 \text { units } \\\text { Direct materials (100\% complete) } & \$ 34,000 \\\text { Conversioncosts( } 30 \% \text { complete) } & \$ 14,000 \\& \\\text { Units started in June } & 65,000 \text { units } \\\text { Units completed in June } & 62,000 \\\text { units Work-in-process inventory,June 30 } & 18,000 \\\text { units } & \\\quad ( 100 \% \text { complete as to materials } & \\\text { and } 60 \% \text { complete as to conversioncosts) } \\& \\\text { Direct materials added in June } & \$ 285,000\\\text { Conversioncostsadded in June } & \$ 210,000\end{array}\end{array}$$ The total cost of goods transferred out of the Printing department is:

• A) $420,825
• B) $543,000
• C) $438,340
• D) $495,000

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Definitions:

Formulate Hypothesis

The process of developing a testable statement or prediction based on observations and existing knowledge.

Reflect Opinion

To show, represent, or express the views, attitudes, or sentiments of individuals or groups.

Inventory Turnover

A ratio indicating how often a company sells and replaces its stock of goods during a particular period, a measure of efficiency in managing inventory.

Current Ratio

Indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future; it is found by dividing current assets by current liabilities.