Question

The following information is available for Columbia, Inc. for the month of January:

		Units		Cost
Work-in-process, January 1 (70% complete)		5,000
Direct materials				$12,000
Direct labor				6,000
Manufacturing overhead				8,000
Work-in-process, January 1				$26,000
Started in production during January		20,000
Cost Added:
Direct materials				$36,000
Direct labor				16,000
Manufacturing overhead				20,200
Total costs added during January				$72,200
Work-in-process, January 31 (80% complete)		2,000

Required:

Materials are added at the beginning of the process. Calculate the cost per equivalent unit in process for conversion and direct material.

Answer 1

weighted average method

calculation of equivalent units :

particular	units	direct materials	conversion
		units	% of completion	units	% of completion
units completed and transferred	23000	23000	100	23000	100
ending WIP	2000	1600	80	1600	80
total	25000	24600		24600

calculationn of cost per equivalent unit :

particular	direct materials	conversion
beginning WIP cost	$12000	$14000
add : cost added during the january	$36000	$36200
total costs (a)	$48000	$50200
equivalent units (b)	24600	24600
cost per equivalent unit (a/b)	$1.95	$2.04

particular	direct materials	conversion
cost per equivalent unit	$1.95	$2.04

note : cost per equivalent unit is rounded upto 2 decimals

calculation of conversion :

particular	bginnigng WIP	started in production
direct labor	$6000	$16000
add : manufacturing overhead	$8000	$20200
conversion	$14000	$36200

note : no information is given for methods. i have used weighted average method.