Reference no: EM132510101

Castellanos Foods is a Greek producer of world-renowned spanakopita. The company uses a first-in, first-out (FIFO) process costing system to cost its production of spanakopita in trays through three departments: filo pastry preparation, filling preparation and baking. Inspection takes place just before the last 20% of the filling is added to the final product in the filling preparation department. The company cost accountant has estimated that this is at 60% incurrence of conversion costs. The remaining direct ingredients are added to all trays that pass inspection. Normal spoilage is 1% of good units that pass inspection in the period.

The following details pertain to the month of December for the filling preparation department:

Beginning work-in-process inventory (trays) 37,500

Trays transferred in from filo pastry preparation 150,000

Trays transferred out to baking 126,000

Ending work-in-process inventory (trays) 60,000

Direct

Transferred ingredients Conversion

Beginning inventory $174,375 $26,250 $28,275

Costs added $705,000 $89,775 $151,830

Percentage completion

Beginning inventory 100% 65%

Ending inventory 50% 40%

Note: Read the question carefully with respect to when the inspection for spoilage takes place.

Question 1: What is the total value of the product transferred from the filling preparation department to baking in December? (Round final answer to the nearest dollar.)

a) $333,300

b) $760,513

c) $838,503

d) $984,805