Reference no: EM132943378

Question - Epsilon Co. manufactures a product that is processed through two departments. The following information was obtained for the first department in January:

All direct materials are added at the beginning of the process, while conversion costs are added evenly throughout the process.

Inspection takes place when the units are 40% complete. Normal spoilage is considered to be 2% of good units passing inspection in the period. All spoiled units are discarded.

Beginning work-in-process (WIP) consisted of 100,000 units, 45% complete with respect to conversion costs.

Costs in beginning inventory included direct materials of $122,750 and conversion costs of $200,920.

There were 247,500 units started during the month, and costs added to production during the month totaled $303,800 for direct materials and $497,200 in conversion costs.

A total of 250,000 units were transferred to the second department, and 93,900 units remained in ending WIP, 20% complete.

Assume that Epsilon uses the weighted-average method for process costing and that the equivalent units have been correctly calculated as 347,500 for direct materials and 270,220 for conversion. What is the total cost of the good units transferred to the second department for January? (Use four decimal places for the equivalent unit cost calculations.)