Question

Hope Hernandez

Co. uses the weighted-average method in its process costing system. Operating data for

conversion costs for the first processing department for the month of

May appear below

Units    Materials . Conversion Costs

BWIP . 10,000.00 . 60% . 80%

Additions 71,000.00

EWIP . 16,000.00 45% . 40%

According to the company's records, direct material, and the conversion cost in beginning work in

process inventory were $21,250 and $25,500 at the beginning of June, respectively. Additional direct material of $249,500 and

conversion costs of $170,850 were incurred in the department during the month. Determine the cost per equivalent unit for

the product.

Answer 1

• Requirement asked:
  Cost per Equivalent unit for product
• Calculation of Equivalent units—

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	65,000 [10000 + 71000 – 16000]	100%	65,000	100%	65,000
Units of ENDING WIP	16,000	45%	7,200	40%	6,400
Equivalent Units of Production			72,200		71,400

• Answer calculation

COST per EUP			Material		Conversion
Cost of Beginning WIP			$          21,250.00		$                                  25,500.00
Cost incurred during the period			$        249,500.00		$                                170,850.00
Total Costs		Costs	$        270,750.00	Costs	$                                196,350.00
Equivalent units of production		EUP	72,200	EUP	71,400
Cost per EUP			$              3.75000		$                                      2.75000

Cost per equivalent unit – Material = $ 3.75
Cost per equivalent unit – Conversion = $2.75

Total Cost per equivalent unit = 3.75 + 2.75 = $ 6.50