Question

Cost per Equivalent Unit

The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $43,050 of direct materials.

ACCOUNT Work in Process—Forging Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Nov.	1	Bal., 3,500 units, 60% completed					51,030
	30	Direct materials, 32,000 units	387,200				438,230
	30	Direct labor	52,870				491,100
	30	Factory overhead	73,022		?		564,122
	30	Goods finished, ? units					?
	30	Bal., 2,800 units, 60% completed					?

a. Determine the number of units transferred to the next department.
units

b. Determine the costs per equivalent unit of direct materials and conversion. If required, round your answer to two decimal places.

Cost per equivalent unit of direct materials	$
Cost per equivalent unit of conversion	$

c. Determine the cost of units started and completed in November.
$

Answer 1

a
Number of units transferred	32700	=3500+32000-2800
b
	Direct materials	Conversion
To complete beginning work in process	0	1400	=3500*(1-60%)
Units started and completed	29200	29200	=32700-3500
Ending work in process	2800	1680	=2800*60%
Equivalent units	32000	32280
	Direct materials	Conversion
Current period costs	387200	125892
Divide by Equivalent units	32000	32280
Cost per equivalent unit	12.10	3.90
Cost per equivalent unit of direct materials	12.10
Cost per equivalent unit of conversion	3.90
c
Units started and completed	29200
X Cost per equivalent unit	16	=12.10+3.90
Cost of units started and completed	467200