Barnett Corporation uses the weighted-average method in its process costing system. The company adds materials at the beginning of the process in Department M. Conversion costs were 75% complete with respect to the 4,000 units in work in process at May 1 and 50% complete with respect to the 6,000 units in work in process at May 31. During May, 12,000 units were completed and transferred to the next department. An analysis of the costs relating to work in process at May 1 and to production activity for May follows (Assume materials were 100% complete on both May 1 and May 31):
Materials Conversion
Work in process May 1 $13,800 $3,740
Costs added during May $42,000 $26,260
The total cost per equivalent unit for May was: A) $5.02 B) $5.10 C) $5.12 D) $5.25
Answer | |||
The Correct Option is B : $5.10 | |||
Explanation | |||
The total cost per equivalent unit for May was : $ 5.10 | |||
Working | |||
Materials |
Conversion | Total | |
Units completed and transferred | 12000 | 12000 | 12000 |
Ending work in process | 6000 | 3000 | 6000 |
Equivalent units | 18000 | 15000 | 18000 |
Total costs | $ 55,800 | $ 30,000 | $ 85,800 |
Equivalent units | 18000 | 15000 | |
Cost per Equivalent unit | 3.1 | 2 | 5.1 |
Therefor , | |||
Option B is Correct : $ 5.10 | |||
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