Question

Cardinal Company manufactures vitamin capsules. For the month of June, Cardinal's encapsulating department had 18,000 tons in beginning inventory (with transferred-in costs of $4,400) and 81,000 tons completed inventory during the month. Further, the mixing department completed and transferred out 72,000 tons at a cost of $22,300 in June. Calculate unit cost for the transferred-in category. (Note: Round answer to two decimal places.)

Answer 1

Answer: $0.30 per unit

Explanation:

The unit cost for the transferred-in category is calculated as:

= (Transfer cost of beginning inventory + transfer cost of transferred out inventory) / (Beginning inventory + Inventory transferred out)

= (4,400 + 22,300) / (18,000 + 72,000)

= 26,700 / 90,000

= 0.2967

= $0.30 per unit