Atwich Corporation Uses the Weighted-Average Method in Its Process Costing

question 86

Multiple Choice

Atwich Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 600 units. The costs and percentage completion of these units in beginning inventory were: A total of 5,100 units were started and 4,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: The ending inventory was 75% complete with respect to materials and 10% complete with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
-The total cost transferred from the first processing department to the next processing department during the month is closest to:

• A)$366,430
• B)$284,600
• C)$309,200
• D)$282,858

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Definitions:

Fixed Component

The part of cost or expense that remains constant in total regardless of fluctuations in the level of activity or volume.

Predetermined Overhead Rate

An estimated rate used to allocate manufacturing overhead costs to individual products or job orders, calculated at the beginning of an accounting period.

Overhead Efficiency

The measurement of how effectively a company uses its overhead costs in the production of goods or services.

Predetermined Overhead Rate

This is a rate used to allocate manufacturing overhead costs to products or job orders, estimated by dividing total estimated overhead costs by an allocation base, such as direct labor hours or machine hours.