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In: Accounting

A company uses a process costing system. Its Assembly Department's beginning inventory consisted of 52,000 units,...

A company uses a process costing system. Its Assembly Department's beginning inventory consisted of 52,000 units, 75% complete with respect to direct labor and overhead. The department completed and transferred out 122,500 units this period. The ending inventory consists of 42,000 units that are 25% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $29,000 and overhead costs of $37,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:

$0.42

$0.35

$0.22

$0.20

$0.18

Solutions

Expert Solution

Correct answer---------------$0.22

Working

Statement of Equivalent Units(Weighted average)
Labor and overhead
Units Complete % Equivalent units
Transferred out            122,500 100%                 122,500
Ending WIP              42,000 25%                   10,500
Total            164,500 Total                 133,000

.

COST Labor
Total Cost to be accounted for (A) $ 29,000
Total Equivalent Units(B)           133,000
Cost per Equivalent Units (C/D) $ 0.22

ekkarill92 answered 2 years ago
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