BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773

Solutions

Chapter
Section
BuyFindarrow_forward

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
ISBN: 9781337115773
Textbook Problem
34 views

For August, Lanny Company had 25,000 units in BWIP, 40% complete, with costs equal to $36,000. During August, the cost incurred was $450,000. Using the FIFO method, Lanny had 125,000 equivalent units for August. There were 100,000 units transferred out during the month. The cost of goods transferred out is

  1. a. $500,000.
  2. b. $360,000.
  3. c. $450,000.
  4. d. $400,000.
  5. e. $50,000.

To determine

Identify cost of goods transferred out, using FIFO method.

Explanation

First-in first out method:

A method which separates the beginning inventory units from units produced during a period is known as FIFO method. In FIFO method, only cost incurred during a period is considered to calculate unit cost.

b.

Use the following formula to calculate cost of goods transferred out:

Cost of goods transferred out=Unit cost×Unit transferred out=$3.60×100,000 units=$360,000

The cost of goods transferred out is $360,000. Therefore, option b. is correct

Still sussing out bartleby?

Check out a sample textbook solution.

See a sample solution

The Solution to Your Study Problems

Bartleby provides explanations to thousands of textbook problems written by our experts, many with advanced degrees!

Get Started

Additional Business Solutions

Find more solutions based on key concepts

Show solutions add

What is a temporary difference? Give examples.

Intermediate Accounting: Reporting And Analysis

How does SCM software support SCM?

Accounting Information Systems

INCOME STATEMENT Pearson Brothers recently reported an EBITDA of 7.5 million and net income of 1.8 million. It ...

Fundamentals of Financial Management, Concise Edition (with Thomson ONE - Business School Edition, 1 term (6 months) Printed Access Card) (MindTap Course List)