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8. Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses a process costing system. The following information pertains to the

8. Giddings Pharmaceutical Company is a maker of drugs for high blood pressure and uses a process costing system. The following information pertains to the final department of Giddings's blockbuster drug called Solcax.

Beginning work-in-process (40% completed) 675 units
Transferred-in 3,500 units
Normal spoilage 375 units
Abnormal spoilage 175 units
Good units transferred out 3,100 units
Ending work-in-process (1/3 completed) 525 units
Conversion costs in beginning inventory $ 2,780
Current conversion costs $ 6,400

Giddings calculates separate costs of spoilage by computing both normal and abnormal spoiled units. Normal spoilage costs are reallocated to good units and abnormal spoilage costs are charged as a loss. The units of Solcax that are spoiled are the result of defects not discovered before inspection of finished units. Materials are added at the beginning of the process. Using the weighted-average method, answer the following question: What are the total conversion costs transferred to finished goods?

Multiple Choice

  • $8,340.

  • $9,300.

  • $8,760.

  • $7,440.

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