Question

Esty Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The material costs were $5,800 and 50% complete, and the conversion costs were $6,500 and 30% complete. A total of 7,700 units were started and 6,600 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

                        Materials costs            $85,300

                        Conversion costs         $168,000

The ending inventory was 70% complete with respect to materials and 10% complete with respect to conversion costs. What was the cost per equivalent unit for materials for the month in the first processing department?

Answer 1

Cost per Unit for material = $11.49

Working

Reconciliation of Units
A	Opening WIP	800
B	Introduced	7,700
C=A+B	TOTAL	8,500
D	Transferred	6,600
E=C-D	Closing WIP	1,900

Statement of Equivalent Units
		Material		Conversion Cost
	Units	Complete %	Equivalent units	Complete %	Equivalent units
Transferred	6,600	100%	6,600	100%	6,600
Closing WIP	1,900	70%	1,330	10%	190
Total	8,500	Total	7,930	Total	6,790

Cost per Equivalent Units
COST	Material	Conversion Cost	TOTAL
Beginning WIP Inventory Cost	$               5,800	$                 6,500	$                  12,300
Cost incurred during period	$             85,300	$           1,68,000	$               2,53,300
Total Cost to be accounted for	$             91,100	$           1,74,500	$               2,65,600
Total Equivalent Units	7,930	6,790
Cost per Equivalent Units	$               11.49	$                 25.70