Cranford Company completed and transferred out 3,000 units in May 2016. There were 100 units in the Work-in-Process Inventory on May 31, 2016, 40% complete as to conversion costs and 100% complete as to materials. The month's charges for conversion costs and material costs were $12,160 and $9,920, respectively. There was no beginning inventory on May 1, 2016. What is the cost of the work transferred-out during May

The cost of the work transferred-out during May is $21,600

Explanation:

Cranford Company completed and transferred out 3,000 units in May 2016. There were 100 units in the Work-in-Process Inventory on May 31, 2016, 40% complete as to conversion costs, 100% complete as to materials.

Material costs per unit = $9,920/3,100 = 3.2

Conversion costs of work transferred-out = $12,160/(3,000 + 100x40%)x3,000 = $12,000

The cost of the work transferred-out during May = Material costs + Conversion costs = $3.2 x 3,000 + $12,000 = $21,600

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