The Morgan Models Company manufactures replica plastic airplane and motorized vehicle models. During October, the firm's Assembly Department started production of 60,000 models. During the month, the firm completed 66,000 models and transferred them to the Finishing Department. The firm ended the month with 22,000 models in ending inventory. There were 28,000 models in beginning inventory. All direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. The FIFO method of process costing is used by Morgan. Beginning work in process was 25% complete as to conversion costs while ending work in process was 50% complete as to conversion costs.

Beginning Inventory: Direct materials costs: $39,200 Conversion costs: $30,800 Manufacturing costs added during the accounting period: Direct materials costs: $90,000 Conversion costs: $280,000

Required : What is the cost of the goods transferred out during October?

*Asker notes*

I have figured out the setup and how to find equivalent units, I'm just not sure how to find the cost of the goods transferred out. Here's what I have so far:

	Units	Direct Materials	Conversion
Beginning Inventory	28,000
Direct Materials		28,000
Conversion			7,000
Started During Period	60,000
To Account For:	88,000
Completed	66,000	66,000	66,000
Ending Inventory	22,000
Direct Materials		22,000
Conversion			11,000

Equivalent Units:

Direct Materials: 66,000 + 22,000 - 28,000 = 60,000

Conversion: 66,000 + 11,000 - 7,000 = 70,000