Question

Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,700 units. The costs and percentage completion of these units in beginning inventory were:

	Cost				Percent Complete
Materials costs	$	6,800				50%
Conversion costs	$	3,000				20%

A total of 8,100 units were started and 7,400 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

	Cost
Materials costs	$	160,000
Conversion costs	$	121,700

The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.

The cost per equivalent unit for materials for the month in the first processing department is closest to: ?

Answer 1

			Equivalent units
Units movement		Physical units	Direct material	Conversion	Total
WIP beginning		1,700
started during current period		8,100
Units to account for		9,800
WIP ending percentage completion			85%	75%
completed and transferred out during the period			2,400	2,400	2,400
WIP ending units			6,290	5,550	7,400
Total units to account for			8,690	7,950	9,800

Costs to account for		Direct material	Conversion	Total costs
Work in process, beginning		6,800	3,000	9,800
Started in production		160,000	121,700	281,700
Total costs to account for		166,800	124,700	291,500
Equivalent units		8,690	7,950
Weighted average cost per equivalent unit		19.1945	15.6855

Answer is:

19.1945

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