ECONOMICS

Detailed explanation-1: -To calculate the goods transferred out, simply take the units transferred out times the sum of the two equivalent unit costs (materials and conversion) because all items transferred to the next department are complete with respect to materials and conversion, so each unit brings all its costs.

Detailed explanation-2: -Fortunately, you can use the work-in-process formula to determine an accurate estimate. It is: Beginning WIP Inventory + Manufacturing Costs – COGM = Ending WIP Inventory.

Detailed explanation-3: -The total cost assigned to units transferred out equals the cost per equivalent unit times the number of equivalent units.

Detailed explanation-4: -Cost of Units Transferred Out is the cost of the units that are finished by the department during the period and transferred out to other departments or to finished goods inventory. The cost includes materials and conversion costs.