Question

In: Accounting

Lebaum Corporation uses the weighted-average method in its process costing system. Data concerning the second processing...

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, $6,598; and conversion cost, $7,514)

$      26,512

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.)

Solutions

Expert Solution

Solution

Cost per equivalent unit for materials= $71.45

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 $ 6,598
Cost incurred during period $ 82,000
Total Cost to be accounted for $ 88,598
Total Equivalent Units                     1,240
Cost per Equivalent Units $                 71.45

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