Sarver Company Uses the Weighted-Average Method in Its Process Costing

question 116

Multiple Choice

Sarver Company uses the weighted-average method in its process costing system.The Fitting Department is the second department in its production process.The data below summarize the department's operations in March:
$$\begin{array} { | l | r | r | } \hline & \text { Units } & \text { Percentage complete } \\\hline \text { Beginning work in process } &7,100 & 70 \% \\\hline \text { inventory } & & \\\hline \text { Transferred in from the } & 61,000 & \\\text { prior department during } \\\text { April }\\\hline\text { Ending work in process } & 4,600 & 30 \% \\\text { inventory }\\\hline\end{array}$$

The Fitting Department's production report indicates that the cost per equivalent unit for conversion cost for March was $8.24.
How much conversion cost was assigned to the units transferred out of the Fitting Department during March?

• A) $482,287.20.
• B) $502,640.00.
• C) $523,240.00.
• D) $561,144.00.

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Definitions:

Price Variance

The difference between the expected cost of an item and its actual cost, often analyzed in budgeting and cost management.

Standard Price

A predetermined cost that serves as a benchmark for evaluating actual cost performance in purchasing or production.

Direct Materials

Raw materials that can be directly traced to the production of specific goods or services.

Manufacturing Cost Variance

The difference between the actual costs of production and the standard or expected costs, indicating efficiency or inefficiency in the manufacturing process.