Question

6) The following information is available for Department C for the month of August Units Work in process, August 1 (70% complete) 10,000 $36.000 18,000 Direct materials Direct labor Manufacturing overhead Total work in process, August 1 Started in production during August Costs added: 24,000 $78,000 40.000 $108,000 48,000 61.040 Direct materials Direct labor Manufacturing overhead Total costs added during August Work in process, August 31 (80% complete) Units completed and transferred out $217,040 4,000 42,000 Materials are added at the beginning of the process. Inspection takes place at the 50 percent point in the conversion process to determine spoiled units. Round unit costs to two decimal places. The company uses the weighted average cost flow assumption Department C's cost per unit for materials using the weighted average method is!

Answer 1

1. Calculate equivalent units for materials
Weighted Average Method
UNITS			Equivalent Units
	Physical Units	% complete	Materials
Units to be accounted for:
Work in process, beginning	10000
Started into production	40000
Total units	50000
Units accounted for:
Good units Completed and Transferred out	42000	100%	42000
Abnormal Spoilage (50000-42000-4000)	4000	100%	4000
Work in process, Ending	4000	100%	4000
Total Units accounted for	50000		50000
2.. costs per equivalent unit.
COSTS	Costs
	Direct Materials
Unit Costs
Work in process, beginning	$             36,000
Costs added during Aug	$          108,000
Total Cost to be accounted for	$          144,000
	÷
Equivalent units	50000
Cost per equivalent unit	$2.88
$2.88 is answer.

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