Question

A department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. For the month of May, there was no beginning Work in Process; 45000 units were completed and transferred out; and there were 13000 units in the ending Work in Process that were 5% complete. During May, $63800 materials costs and $54780 conversion costs were charged to the department. How much are unit production costs for materials and conversion costs for May if the weighted-average method is used, rounded to the nearest whole cent?

     Materials          Conversion Costs

$2.04                    $1.22

$1.40                    $1.20

$1.99                    $1.71

$1.10                    $1.20

Answer 1

	Equivalent Units
		Materials Cost	Conversion Cost
	Units were completed and transferred out	45,000	45,000
	Add: Ending work in process
	Material (13,000 x 100% )	13,000
	Conversion Costs ( 13,000 x 5% )		650
	Equivalent Units	58,000	45,650
	Unit production costs:-
		Materials Cost	Conversion Cost
	Cost Added during the may	63,800	54,780
	/ Equivalent Units	58,000	45,650
	Unit Production costs	1.10	1.20
	Correct answer is option 4 (i.e. Materials 1.10 , Conversion Costs 1.20 ) .