Question

Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to undetectable materials defects. Spoiled units generally constitute 44% of the good units.

Data for December 2017 are as follows:

WIP, beginning inventory 12/1/2017 22,700 units

    Direct materials (100% complete)

 Conversion costs (75% complete)

Started during December 77,000 units

Completed and transferred out 12/31/2017 72,900 units

WIP, ending inventory 12/31/2017 18,000 units

  Direct materials (100% complete)

     Conversion costs (70% complete)

Costs for December:     

WIP, beginning Inventory:  

   Direct materials $152,000

Conversion costs 77,200

Direct materials added 232,400

   Conversion costs added 296,000

What is the total cost per equivalent unit using the weighted−average method of process costing? (Round any cost per unit calculations to the nearest cent.)

Answer 1

Calculation of equivalent units of production for Material cost and conversion cost of Processing department
	Physical Units	% complete of Material cost	Equivalent units of Material cost	% complete of Conversion cost	Equivalent units of Conversion cost
Units completed and transferred	72900	100%	72900	100%	72900
Units in ending work in process	18000	100%	18000	70%	12600
Equivalent Units of production			90900		85500
Calculation of cost per equivalent unit of production for Material and Conversion cost of Processing department
	Material	Conversion
Cost of beginning Work in process	$152,000.00	$77,200.00
Cost incurred in November	$232,400.00	$296,000.00
Total Cost to account for	$384,400.00	$373,200.00
/ Equivalent Units of production	90900	85500
Cost per equivalent unit	$4.23	$4.36