Question

Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 700 units. The costs and percentage completion of these units in beginning inventory were:

	Cost				Percent Complete
Materials costs	$	5,800				50%
Conversion costs	$	2,000				20%

A total of 7,100 units were started and 6,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

	Cost
Materials costs	$	159,000
Conversion costs	$	120,700

The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.

The cost per equivalent unit for materials for the month in the first processing department is closest to:

Answer 1

Correct answer-----------$21.71

Working

Reconciliation of Units
A	Beginning WIP	700
B	Introduced	7,100
C=A+B	TOTAL	7,800
D	Transferred out	6,400
E=C-D	Ending WIP	1,400

.

Statement of Equivalent Units(Weighted average)
				Material
	Units			Complete %	Equivalent units
Transferred out	6,400			100%	6,400
Ending WIP	1,400			85%	1,190
Total	7,800			Total	7,590

.

COST		Material
Beginning WIP Inventory Cost		$ 5,800
Cost incurred during period		$ 159,000
Total Cost to be accounted for		$ 164,800
Total Equivalent Units		7,590
Cost per Equivalent Units		$                 21.71