Question

THE Company operates two departments, the assembly
department and the shipping department. During May,
the assembly department reported the following
information:

                                    % complete    % complete
                            units      DM         conversion 
work in process, May 1      46,000     45%           59%
units started during May    68,000
work in process, May 31     23,000     75%           60%

The cost of beginning work in process and the costs
added during May were as follows:

                                 DM           Conversion
work in process, May 1        $ 60,620         $ 75,775
costs incurred during May     $452,485         $660,325

THE Company uses a weighted average process costing
system.

The unit cost in May with respect to direct materials
was equal to:

Group of answer choices

$6.02

$5.86

$5.31

$4.74

$4.18

none of the above choices are correct

Answer 1

Correct Option D i.e. $4.74
	Actual Units
Calculation of Physical UNITS:
Units in beginning inventory	46000
Units started during the period	68000
Units to be accounted for	114000
	Actual Units	Equivalent Units
		Material	Conversion
Units Completed and Transferred	91000	91000	91000
Units in ending inventory	23000	17250	13800
No of Equivalent Units	114000	108250	104800
Costs:
		Material	Conversion	Total
Costs in beginning inventory		60,620	75,775	136,395
Cost added during the year		452,485	660,325	1,112,810
Total cost to account for		513,105	736,100	1,249,205
Equivalent Units from above		108250	104800
Cost per equivalent unit		4.74	7.02