The Machining Department is the first of a 2-stage production process. Spoilage is identified when the units have completed the Machining process.
5. The Machining Department is the first of a 2-stage production process. Spoilage is identified when
the units have completed the Machining process. Costs of spoiled units are assigned to units completed and transferred to the second department in the period spoilage is identified. The following information concerns Machining’s conversion costs in May 2016:
| Using the weighted average method, what was Machining’s conversion cost transferred to the second production department? |
| a. $150,000 |
| b. $160,000 |
| c. $144,000 |
| d. $140,000 |
| Units | Conversion Costs | |
| Beginning WIP (50% Complete) | 4,500 | $20,000 |
| Units started during May | 16,500 | $160,000 |
| Spoilage – normal | 500 | |
| Units completed and transferred | 15,500 |
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