Question

Costs per Equivalent Unit

Georgia Products Inc. completed and transferred 141,000 particle board units of production from the Pressing Department. There was no beginning inventory in process in the department. The ending in-process inventory was 12,000 units, which were 1/2 complete as to conversion cost. All materials are added at the beginning of the process. Direct materials cost incurred was $566,100, direct labor cost incurred was $83,350, and factory overhead applied was $19,550.

Determine the following for the Pressing Department. Round "cost per equivalent unit" answers to the nearest cent.

a. Total conversion cost	$
b. Conversion cost per equivalent unit	$
c. Direct materials cost per equivalent unit	$

Answer 1

Solution

a. Total conversion cost	$ 102,900
b. Conversion cost per equivalent unit	$ 0.70
c. Direct materials cost per equivalent unit	$ 3.70

Working

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	141,000			100%	141,000	100%	141,000
Ending WIP	12,000			100%	12,000	50%	6,000
Total	153,000			Total	153,000	Total	147,000

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost				$ 0
Cost incurred during period		$ 566,100	$ 102,900	$ 669,000
Total Cost to be accounted for		$ 566,100	$ 102,900	$ 669,000
Total Equivalent Units		153,000	147,000
Cost per Equivalent Units		$                   3.70	$                     0.70	$                4.40