Question

1. 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 = $61.16 Ending Inventory = $183,491
   		Cost per Unit = $61.16 Ending Inventory = $66,036
   		Cost per Unit = $70.58 Ending Inventory = $76,891
   		Cost per Unit = $63.33 Ending Inventory = $190,000
   		Cost per Unit = $72.66 Ending Inventory = $217,991
   		Cost per Unit = $70.58 Ending Inventory = $211,730
   		Cost per Unit = $72.66 Ending Inventory = $78,035
   		Cost per Unit = $63.33 Ending Inventory = $68,500

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:	Material	Conversion Costs	Whole 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
		Material	Conversion Costs	Total
	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/-