A company uses a process cost accounting system. Its Assembly Department\'s begi

Question

A company uses a process cost accounting system. Its Assembly Department's beginning inventory consisted of 52,400 units, 3/4 complete with respect to direct labor and overhead. The department completed and transferred out 121,500 units this period. The ending inventory consists of 42,400 units that are 1/4 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 $30,000 and overhead costs of $38,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:

Explanation / Answer

Using weighted average method, we do not need to consider the beginning inventory. Equivalent units of labour = 121500 + 42400 x 0.25 = 132100 units Cost per equivalent units = 30000/132100 = $0.23 Hope this helps!

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