Question

1. Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete 65% 45% Materials costs Conversion costs $ 5,700 $ 6,800 A total of 6,500 units were started and 5,900 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 $ 125,500 Conversion costs $ 207,000 The ending inventory was 50% complete with respect to materials and 35% complete with respect to conversion costs. The cost per equivalent unit for materials for the month in the first processing department is closest to: A) $19.01 B) $19.61 I C) $20.50 D) $18.19

Answer 1

A D 2. B с 1 Equivalent Units of Production (EUP) - Weighted Average Method % EUP- Units Materials Materials 3 Units completed during the period 5,9001 100% 5,900 4 Ending work in process 1.000 50% 5001 5 Equivalent Units of Production 6,900 6,400 6 7 Cost per Equivalent unit of Production 8 Cost of beginning inventory 9 Cost incurred during the period 10 Total costs 11 Equivalent units of production 12 Cost per equivalent unit of production Materials $5,700 $125,500 $131,200 6.400 $20.50 13 14 Thus, the correct option is 'C. $20.50'. Calculations are shown below: B 1 Equivalent Units of Production (EUP) - Weighted Average Method EUP- 2 Units % Materials Materials 3 Units completed during the period 5900 1 =B3*C3 4 Ending work in process I=B5-B3 0.5 =B4*C4 5 Equivalent Units of Production =400+6500 =D3+D4 6 7 Cost per Equivalent unit of Production Materials 8 Cost of beginning inventory 5700 9 Cost incurred during the period 125500 10 Total costs =C8+C9 11 Equivalent units of production =D5 12 Cost per equivalent unit of production =C10/C11 13 14 Thus, the correct option is 'C. $20.50'.