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O'Leary Company manufactures Product Z in a two-stage production cycle in Departments A and B. Materials are added at the beginning of the process in
O'Leary Company manufactures Product Z in a two-stage production cycle in Departments A and B. Materials are added at the beginning of the process in Department B. O'Leary uses the weighted-average method. Conversion costs for Department B were 40% complete as to the 20,000 units in the beginning work-in-process (WIP) inventory and 50% complete as to the 28,000 units in the ending work-in-process inventory. 40,000 units were completed and transferred out of Department B during October. An analysis of the costs relating to work-in-process inventories and production activity in Department B for October follows: Transferred- Materials Conversion in Costs Costs Costs $ 4,000 $ 40,000 $12,000 WIP, October 1: Costs added in October 96,000 22,000 17,600 The total cost per equivalent unit transferred-out for October of Product Z, rounded to the nearest penny, was: Multiple Choice $2.90 $2.75 $2.80 $2.95 $2.85
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