he following data relates to Plastic Fantastic which manufactures extruded plastic and silicon parts for use in logistic storage facilities. Plastic Fantastic operate under a process costing system in which all Direct Materials are added at the start and Conversion Costs are incurred evenly over the whole of production.
On January 1st 2012 Plastic Fantastic has 40,000 units in Work in Process (WIP) which are complete as to Direct Materials ($120,000) and 40% complete for Conversion ($17,700). 375,000 units are commenced during January and units completed and transferred to Finished Goods amounted to 400,000. Units in closing WIP are 25% completed.
The following costs were incurred during January:
Direct Materials $1,050,000
Conversion Costs $167,500
Required:
(i) Using the Weighted Average Cost Method determine the cost value of closing WIP and the cost value of goods transferred out during the period