Question

Air and Breeze Co produces Ceiling Fans and assigns its costs using the process costing system. For the month of January, the following information was provided regarding units processed:

Units Completed and Transferred Out	12,000 units
Units in Ending Inventory	3,000 units

The units in ending work in process inventory were 30% complete with respect to direct materials and 55% complete with respect to conversion costs.

In addition, Air and Breeze Co had the following costs associated with their product in the month of January:

Beginning Work In Process - Direct Materials	$120,000
Beginning Work In Process - Conversion Costs	$30,000
Direct Materials Added	$600,000
Conversion Costs Added	$200,000

What is the cost per unit? And, what is the cost assigned to units in ending inventory?

		Cost per Unit = $63.33 Ending Inventory = $68,500
		Cost per Unit = $70.58 Ending Inventory = $76,891
		Cost per Unit = $70.58 Ending Inventory = $211,730
		Cost per Unit = $61.16 Ending Inventory = $66,036
		Cost per Unit = $61.16 Ending Inventory = $183,491
		Cost per Unit = $63.33 Ending Inventory = $190,000
		Cost per Unit = $72.66 Ending Inventory = $78,035
		Cost per Unit = $72.66 Ending Inventory = $217,991

Answer 1

			Material	Conversion Costs
		Units Transferred Out (A)	12,000	12,000
		Equivalent Closing Units (3000*30%/55%)	900	1,650
		Equivalent Units	12,900	13,650
		Cost Per Equivalent Unit:
		Work in Process Opening	1,20,000	30,000
		Add: Costs Added During the Period	6,00,000	2,00,000
		Total Cost to be Accounted	7,20,000	2,30,000
		Equivalent Units	12,900	13,650
		Cost Per Equivalent Unit	55.81	16.85	72.66
		Equivalent Closing Units (3000*30%/55%)	900	1,650
		Cost Per Equivalent Unit	55.81	16.85
		Total Cost Assigned to Closing Units	50,233	27,802	78,035
		Answer is 72.66 PU and Total Cost 78035/-