Question

Eclypso Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department.

Information for the mixing department for October is as follows:

Work in process, October 1:
No. of units (45% complete)	7,200
Direct materials	$42,000
Direct labor	$50,400
Overhead	$14,400

During October, 38,400 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during October:

Direct materials	$144,000
Direct labor	$192,000
Overhead	$ 60,000

By October 31, 3,600 units that were 85% complete remained in the mixing department. Eclypso uses the weighted average method. Which of the following is the total cost per equivalent unit of production? (Note: Round your answer to two decimal places.)

a.$11.26

b.$12.13

c.$8.52

d.$10.76

Answer 1

Correct answer----------b.$12.13

Working

Reconciliation of Units
A	Beginning WIP	7,200
B	Introduced	34,800
C=A+B	TOTAL	42,000
D	Transferred out	38,400
E=C-D	Ending WIP	3,600

.

Statement of Equivalent Units(Weighted average)
				Material		Conversion cost
	Units			Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	38,400			100%	38,400	100%	38,400
Ending WIP	3,600			85%	3,060	85%	3,060
Total	42,000			Total	41,460	Total	41,460

.

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion cost	TOTAL
Beginning WIP Inventory Cost		$ 42,000	$ 64,800	$ 106,800
Cost incurred during period		$ 144,000	$ 252,000	$ 396,000
Total Cost to be accounted for		$ 186,000	$ 316,800	$ 502,800
Total Equivalent Units		41,460	41,460
Cost per Equivalent Units		$                   4.49	$                     7.64	$12.13