Question

During March, the production department of a process operations system completed and transferred to finished goods 26,000 units that were in process at the beginning of March and 170,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 32,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor. The production department incurred direct materials cost of $253,800 and its beginning inventory included materials cost of $93,800. Compute the direct materials cost per equivalent unit for the department using the weighted average method. ces

Answer 1

Answer: $1.52

	Whole	Equivalent Units
	Units	Direct Materials
Inventory in process, beginning	26000
Started and completed	170000
Transferred to finished goods	196000	196000
Inventory in process, ending	32000	32000
Total units	228000	228000

Cost of beginning inventory	93800
Costs incurred during the period	253800
Total costs	347600
Divide by: Equivalent units of production	228000
Cost per equivalent unit $	1.52