Crimp Corporation Uses the First-In, First-Out Method in Its Process

Crimp Corporation uses the first-in, first-out method in its process costing system. Department A had 10,000 units in process at the beginning of January that were 40% complete with respect to conversion costs. All materials are added at the beginning of the process in Department A. The January 1 work in process inventory in Department A contained $20,000 in materials cost and $11,000 in conversion cost. During January, materials costs were $2.00 per equivalent unit and conversion costs were $2.50 per equivalent unit. All of the units in the beginning work in process inventory were completed and transferred out during the month. What was the total cost attached to these units when they were transferred to the next department?

A) $35,000
B) $31,000
C) $46,000
D) $337,500

Correct Answer:

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