In this step, the cost of the units transferred out of the current process to Finished Goods is computed by using the information calculated in steps 2 and 3.
Recall that the weighted average method assumes that BWIP units are started and completed during the current period. Because of this assumption, BWIP costs were included in the cost per equivalent unit. Therefore, costs transferred out are calculated by multiplying the units started and completed (step 2) times the weighted average cost per equivalent unit.
The FIFO method requires the BWIP equivalent units to be added to the units started and completed to determine the units transferred out. These units are multiplied times the FIFO cost per equivalent unit (step 3). This amount is added to the costs in BWIP to determine the costs transferred out.If required, round the cost per equivalent unit amounts to the nearest cent.