Question

Corny Inc. produces a single product in a process costing environment. All materials are added when the conversion process is 60% complete. For the current period the following information is given:

Units Material Costs Conversion Costs

Beginning Inventory	3,500	$4,500	$5,400
Started During the Current Period	20,000	$32,000	$78,200
Ending Inventory	2,000

The beginning inventory was 40% complete as to conversion, while the ending inventory was 70% completed for conversion purposes. Corny uses the weighted-average costing method.

The cost per equivalent unit for direct materials using weighted average is:

Answer 1

The cost per equivalent unit for direct materials using weighted average is: $1.55

Working

Reconciliation of Units
A	Beginning WIP	3,500
B	Introduced	20,000
C=A+B	TOTAL	23,500
D	Transferred out	21,500
E=C-D	Ending WIP	2,000

.

Statement of Equivalent Units(Weighted average)
				Material
	Units			Complete %	Equivalent units
Transferred out	21,500			100%	21,500
Ending WIP	2,000			100%	2,000
Total	23,500			Total	23,500

.

Cost per Equivalent Units (Weighted average)
COST		Material
Beginning WIP Inventory Cost (A)		$ 4,500
Cost incurred during period (B)		$ 32,000
Total Cost to be accounted for (C=A+B)		$ 36,500
Total Equivalent Units(D)		23,500
Cost per Equivalent Units (E=C/D)		$ 1.55