Question

During July, the production department of a process operations system completed and transferred to finished goods 10,000 units that were in process at the beginning of July and 76,000 that were started and completed in July July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor. At the end of July, 15,000 additional units were in process in the production department and were 100% complete with respect to materials and 25% complete with respect to labor. The beginning inventory included labor cost of $52,100 and the production department incurred direct labor cost of $450.750 during July Compute the direct labor cost per equivalent unit for the department using the weighted-average method.

Answer 1

ANSWER: $ 5.60 Explanantion Particulars Calculations Direct labour Completed and transferred to finished goods (76000 + 10000) * 100% 86000 units Ending work in process Direct labour 15000 *25% 3750 units Equivalent Units = 86000+3750 Costs of beginning inventory 89750 Units $ 52,100.00 4,50,750.00 $ 5,02,850.00 Cost Incurred for direct labour in the period Total Cost = $ 450750+$ 52100 Cost per equilent units = 502,850 / 89750 Units 5.60