Answer (D) is correct . The total equivalent units for raw materials equals 10,000 because all materials for the ending work-in-process had already been added to production. Hence, the materials cost per unit was $3.30 ($33,000 ¡Â 10,000). For conversion costs, the total equivalent units equals 8,500 [8,000 completed + (2,000 in EWIP ¡Á 25%)]. Thus, the conversion cost was $2.00 per unit ($17,000 ¡Â 8,500). The total cost transferred was therefore $42,400 [8,000 units ¡Á ($3.30 + $2.00)].
Answer (A) is incorrect because A portion of the total costs is still in work-in-process.
Answer (B) is incorrect because The amount of $40,000 assumes that work-in-process is 100% complete as to conversion costs.
Answer (C) is incorrect because The amount of $53,000 exceeds the actual costs incurred during the period. Given no beginning inventory, the amount transferred out cannot exceed the costs incurred during the period.
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The cost of the units transferred to Snapping Turtle’s Finishing Department is
