Question

Materials are added at the beginning of the production process at Campo Company. The following information on the physical flow of units is available for the month of November:

Beginning work in process (58% complete)	49,000
Started in November	550,000
Completed in November and transferred out	525,000
Ending work in process (60% complete)	74,000

Cost data for November show the following:

Beginning WIP inventory
Direct materials costs	$	29,300
Conversion costs		43,700
Current period costs
Direct materials costs	$	340,950
Conversion costs		1,279,550

Required:

a. Compute the equivalent units for the conversion cost calculation assuming Campo uses the weighted-average method.

b. Compute the cost per equivalent unit for materials and conversion costs for November. (Round your answers to 2 decimal places.)

Answer 1

• [a]
  Equivalent unit for Conversion Cost = 569,400

EUP - Weighted Average Method	Units	% Material	EUP Materials	% Conversion	EUP - Conversion
Units TRANSFERRED	525,000	100%	525,000	100%	525,000
Units of ENDING WIP	74,000	100%	74,000	60%	44,400
Equivalent Units of Production			599,000		569,400

• [b]

Cost per EU – Material = $ 0.62
Cost per EU – Conversion = $ 2.32

COST per EUP			Material		Conversion
Cost of Beginning WIP			$          29,300.00		$                                  43,700.00
Cost incurred during the period			$        340,950.00		$                            1,279,550.00
Total Costs		Costs	$        370,250.00	Costs	$                            1,323,250.00
Equivalent units of production		EUP	599,000	EUP	569,400
Cost per EUP			$              0.61811		$                                      2.32394