Reference no: EM131792865

Azalea's Totes makes fashion handbags out of leather. The manufacturing takes place in two departments: the cutting department and the sewing department. The cutting department cuts the leather into pieces, bundles the pieces for each handbag into a unit and sends the bundles to the sewing department. Then, the sewing department sews the pieces into the finished products with zippers, buckles and decorative pieces added. Azalea's uses process costing to determine its product costs. All materials for each department are added at the beginning of the process, and conversion costs are added evenly throughout. The following details are available for May production in the sewing department: Beginning inventory Number of tote bundles 300 Direct materials $3,825 Conversion cost $2,250 Transferred-in cost $7,500 Per cent completion 50% Month of May activity Number of totes transferred from cutting 3,500 Number of totes completed 3,400 Per cent completion of ending inventory 65% Transferred-in cost, direct materials cost and conversion cost per equivalent unit have not changed from the previous period. The company uses the weighted average method. What is the cost of the handbags transferred out of the sewing department for the month of May?

a) $68,850

b) $94,350

c) $153,850

d) $179,350