Question

Gunes Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 2,700 units. The costs and percentage completion of these units in beginning inventory were:

	Cost				Percent Complete
Materials costs	$	12,500				65%
Conversion costs	$	14,700				30%

A total of 10,400 units were started and 9,300 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	$	144,000
Conversion costs	$	361,400

The ending inventory was 50% complete with respect to materials and 35% 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

	Material
Cost per equivalnet unit	13.97
Gunes Corporation
Working Note 1:
	Actual Units
Caluclation of Physical UNITS:
Units in begining inventory	2,700
Units started during the period	10,400
Units to be accounted for	13,100
	Actual Units	Equivalent Units
		Material	Conversion
Units Completed and Transferred	9300	9,300	9,300
Units in ending inventory	3,800	1,900	1,330
Total accounted for	13100	11,200	10,630
Working Note 2:
Costs to be acounted for:
	Total	Material	Conversion
Costs in beginning inventory	27,200	12,500	14,700
Cost added dueing the year	505,400	144,000	361,400
Total cost to account for	532,600	156,500	376,100
Equivalent Units from above		11200	10630
Cost per equivalnet unit		13.97	35.38