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 $93,840 of direct materials.

ACCOUNT Work in Process—Forging Department							ACCOUNT NO.
Date		Item	Debit		Credit		Balance
							Debit		Credit
Nov.	1	Bal., 6,900 units, 40% completed					104,052
	30	Direct materials, 63,000 units	837,900				941,952
	30	Direct labor	104,520				1,046,472
	30	Factory overhead	144,342		?		1,190,814
	30	Goods finished, ? units					?
	30	Bal., 5,500 units, 70% 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

	Beginning work in process			6,900	Completed & transferred			64,400
	started during the year			63,000	ending work in process			5,500
	units to be accounted			69,900	units accounted for			69,900
a)	number of units transferred			64,400
	Equivalent units
				units	%	Materials	%	CC
	Completed & transferred			64,400	100%	64,400	100%	64,400
	ending work in process			5,500	100%	5,500	70%	3850
	Equivalent units					69,900		68,250
	Cost per unit
					Materials	CC	total
	Beginning work in process				93,840	10,212	104,052
	Cost added during the year				837,900	248862	1,086,762
	total cost				931,740	259,074	1,190,814
	Equivalent units				69,900	68,250
	cost per unit				13.33	3.80	17.13
	cost of units started and completed				64400*17.13
					1102887
	a)		64,400	units
	b)	cost per equivalent unit of direct material				13.33
		cost per equivalent unit of conversion				3.80
	c)	1102887	(answer may vary slightly due to rounding)