Question

Assume the following information:

					Percent Complete
Milling Department	Units				Materials				Conversion
Beginning work in process inventory		200				40	%			30	%
Units started into production during March		6,200
Units completed during the period and transferred to the next department		5,800				100	%			100	%
Ending work in process inventory		600				70	%			60	%

Milling Department	Materials				Conversion
Cost of beginning work in process inventory	$	10,000			$	15,000
Costs added during the period		299,000				385,000
Total cost	$	309,000			$	400,000

Using the weighted-average method, the cost per equivalent unit for materials is closest to:

Answer 1

Correct Answer:

The cost per equivalent unit for materials is $ 49.68

Working:

Statement of Equivalent Units(Weighted average)
		Material	Conversion
	Units		Complete %	Equivalent units	Complete %	Equivalent units
Transferred out	5,800		100%	5,800	100%	5,800
Ending WIP	600		70%	420	60%	360
Total	6,400		Total	6,220	Total	6,160

Cost per Equivalent Units (Weighted average)
COST		Material	Conversion	TOTAL
Beginning WIP Inventory Cost (A)		$ 10,000	$ 15,000	$ 25,000
Cost incurred during period (B)		$ 299,000	$ 385,000	$ 684,000
Total Cost to be accounted for (C=A+B)		$ 309,000	$ 400,000	$ 709,000
Total Equivalent Units(D)		6,220	6,160
Cost per Equivalent Units (E=C/D)		$ 49.68	$ 64.94	$ 114.61

End of Answer.

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