UNIT 8 $6,860 ($9,800 X .70) COST OF NEXT 7 UNITS = (8 X $6,860...

193. Correct answer b. Southwood would transfer 16,000 units to finished goods inventory at a

cost of $154,850 as shown below.

Inventory cost = Cost of good units + Cost of normal spoilage

= [16,000 x ($3.50 + $6.00)] + {300 x ($3.50 + $6.00)]

= $152,000 + $2,850

= $154,850