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The rest-a-lot chair company manufacturers a standard recliner. during february, the firm's assembly department started production of 75,000 chairs. during the month, the firm completed 80,000 chairs, and transferred them to the finishing department. the firm ended the month with 10,000 chairs in ending inventory. there were 15,000 chairs in beginning inventory. all direct materials costs are added at the beginning of the production cycle and conversion costs are added uniformly throughout the production process. the fifo method of process costing is used by rest-a-lot. beginning work in process was 30% complete as to conversion costs, while ending work in process was 80% complete as to conversion costs

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Calculation of the Cost of Goods Transferred Out During February:

Units that were started during February were completed during February = 75,000 - 10,000 = 65,000

Equivalent units for conversion costs during February = (15,000 x 0.7) + 65,000 + 10,000 (0.8) = 83,500

The amount of direct materials cost assigned to ending work-in-process inventory at the end of February = $168,000/75,000 = $2.24 x 10,000 = $22,400

The Costs of Beginning Inventory ($24,000 + $35,000)$59,000

Direct Materials ($2.24 * 65,000)$145,600

Conversion Costs [$278,000/(10,500 + 8,000 + 65,000)] x 65,000$216,450

FG beginning inventory (15,000 x 0.7 x 3.33)$34,965

Total Costs of Goods$456,015

Therefore, the Total Cost of Goods Transferred Out During February is $456,015

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