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 2,100 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $ 11,900 65% Conversion costs $ 14,100 30% A total of 9,800 units were started and 8,700 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 $ 143,400 Conversion costs $ 360,800 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:

• $13.13

• $11.39

• $12.53

• $15.08

Answer 1

Correct answer-----------$15.08

Working

Reconciliation of Units
A	Beginning WIP	2,100
B	Introduced	9,800
C=A+B	TOTAL	11,900
D	Transferred out	8,700
E=C-D	Ending WIP	3,200

.

Statement of Equivalent Units(Weighted average)
			Material
	Units			Complete %	Equivalent units
Transferred out	8,700			100%	8,700
Ending WIP	3,200			50%	1,600
Total	11,900			Total	10,300

.

COST		Material
Beginning WIP Inventory Cost (A)		$ 11,900
Cost incurred during period (B)		$ 143,400
Total Cost to be accounted for (C=A+B)		$ 155,300
Total Equivalent Units(D)		10,300
Cost per Equivalent Units (E=C/D)		$ 15.08