P5.42 LO 5.7 (appendix) Transferred-in costs; weighted average method: manufacturer Autofab Ltd uses a process costing system. A unit of product passes through three departments- moulding, assembly and finishing-before it is completed. The following production took place in the finishing department during May: Work in process Inventory, 1 May Units transferred in from assembly department Units transferred out to finished goods Inventory Units 1400 14000 11900 Raw material is added at the beginning of processing in the finishing department. The work in process inventory was 70 per cent complete as to conversion on 1 May, and 40 per cent complete as to conversion on 31 May.

Autofab Ltd uses the weighted average method of process costing. The equivalent units and costs per equivalent unit of production for each cost element for the finishing department are shown as follows: Transferred-in costs Raw material Conversion cost Total Required 1. Calculate the following amounts: Equivalent units Cost per equivalent unit 15400 $10.00 15400 2.00 13300 6.00 $18.00

(a) cost of units transferred to finished goods inventory during May

(b) cost of the finishing department's work in process inventory on 31 May. 2. The total costs of prior departments included in the work in process inventory of the finishing department on 1 May amounted to $13500. Prepare the journal entry to record the transfer of the goods from the assembly department to the finishing department during May.