Callahan Company uses the? weighted-average method in its process costing system
ID: 2412901 • Letter: C
Question
Callahan Company uses the? weighted-average method in its process costing system. The Packaging Department started the month with 290 units in? process, started 1,490 ?units, and had 180 units in process at the end of the period. All materials are added at the beginning of the? process, and conversion costs are incurred uniformly. The units in process at the end of the month are 10?% complete with respect to conversion costs. During the month 1,600 units were completed and transferred out. The department incurred the following? costs:
Beginning WIP
Added this month
Total
Direct Materials
$700
$3,400
$4,100
Conversion Costs
300
6,150
6,450
Total
$1,000
$9,550
$10,550
The cost per equivalent unit for direct materials is ?(Round your answer to two decimal?places.)
A. $2.56
B. $7.30
C. $5.93
D. $2.30
Beginning WIP
Added this month
Total
Direct Materials
$700
$3,400
$4,100
Conversion Costs
300
6,150
6,450
Total
$1,000
$9,550
$10,550
Explanation / Answer
Units transferred out = 290+1490-180 = 1600
Equivalent unit of material = 1600+180 = 1780
Cost per equivalent unit of material = 4100/1780 = 2.30
So answer is d) $2.30
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