Question

Charlie Chairs​ Inc., manufactures plastic moldings for car seats. Its costing system utilizes two cost​ categories, direct materials and conversion costs. Each product must pass through Department A and Department B. Direct materials are added at the beginning of production. Conversion costs are allocated evenly throughout production.

Data for Department A for February 2017 are​:
Work in​ process, beginning​ inventory, 45​% converted	520 units
Units started during February	880 units
Work in​ process, ending inventory	140 units
Costs for Department A for February 2017 are​:
Work in​ process, beginning​ inventory:
Direct materials	$182,000
Conversion costs	$210,000
Direct materials costs added during February	$605,000
Conversion costs added during February	$426,000

What is the unit cost per equivalent unit of beginning inventory in Department​ A? (Round the final answer to the nearest whole​ dollar.)

A. $547

B.$1,247

C.$1,724

D.$350

Answer 1

Correct answer------------B.$1,247

Working

	Direct material	Conversion costs	Total
Equivalent units in beginning	520	234
Cost of beginning inventory	$    182,000	$           210,000
Cost per equivalent unit of beginning inventory	$            350	$                   897	$             1,247

Material units of beginning are 100% complete for material.

Units for conversion are 45% complete for conversion cost , (520 x 45%=234 units)