Fairfax Company uses weighted-average process costing to account for its product

Question

Fairfax Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During September, the company transferred 725,000 units of product to finished goods. At the end of September, the goods in process inventory consists of 200,000 units that are 50% complete with respect to labor. Beginning inventory had $420,875 of direct materials and $82,500 of direct labor cost. The direct labor cost added in September is $1,567,500, and the direct materials cost added is $2,816,625.

1(a) Determine the equivalent units of production with respect to direct labor.

1(b) Determine the equivalent units of production with respect to direct materials.

Compute both the direct labor cost and the direct materials cost per equivalent unit.

3(a)

Compute both direct labor cost and direct materials cost assigned to units completed and transferred

3(b)

Compute both direct labor cost and direct materials cost assigned to ending goods in process inventory.

Explanation / Answer

(a) total units with respect to labour cost = 750000 103000=853000 Labour cost in the month = 2025875 Labour cost (opening inventory) = 106625 Total labour cost = 2025875 106625 = 2132500 Labour cost per unit = total labour cost /total labour equivalent units =2132500/853000=2.5 Equivalent Labour units of production in the month = 2025875/2.5 = 810350 Post is limited to 400 chs. sorry frs ,,as you only one questions to be answered at at a tym

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