Question

Lebaum Corporation uses the weighted-average method in its process costing system. Data concerning the second processing department for the most recent month are listed below:

Production data:
Units in process, beginning:    (materials 60% complete; conversion 20% complete)	400 units
Units transferred in during the month from the preceding department:	1,200 units
Units completed and transferred out during the month:	1,000 units
Units in process, ending:    (materials 40% complete; conversion 80% complete)	? units

Cost data:
Work in process, beginning: (consists of cost transferred in, $12,400; materials cost, $9,078; and conversion cost, $7,514)	$      28,992
Costs transferred in during the month:	$    126,000
Materials cost added during the month:	$      82,000
Conversion costs incurred during the month:	$    108,000

What is the cost per equivalent unit for materials? (Choose the closest answer.)

Answer 1

Solution

Cost per equivalent unit for materials= $73.45

Working

Reconciliation of Units
A	Beginning WIP	400
B	Introduced	1,200
C=A+B	TOTAL	1,600
D	Transferred out	1,000
E=C-D	Ending WIP	600

.

Statement of Equivalent Units(Weighted average)
				Material
	Units			Complete %	Equivalent units
Transferred out	1,000			100%	1,000
Ending WIP	600			40%	240
Total	1,600			Total	1,240

.

Cost per Equivalent Units (Weighted average)
COST		Material
Beginning WIP Inventory Cost		$ 9,078
Cost incurred during period		$ 82,000
Total Cost to be accounted for		$ 91,078
Total Equivalent Units		1,240
Cost per Equivalent Units		$                 73.45