17. A production department\'s output for the most recent month consisted of 8,0

Question

17. A production department's output for the most recent month consisted of 8,000 units completed and transferred to the next stage of production and 5,000 units in ending Work in Process inventory ending Work in Process inventory were 50% complete with respect to both direct materials and conversion costs. Calculate the equivalent units of production for the month, assuming the company uses the weighted average method A. 6,500 units. B. 9,000 units. C. 13,000 units. D. 5,500 units. E. 10,500 units. . The units in

Explanation / Answer

17. Calculation of Equivalent units of production

Assuming the weighted average method.

Equivalent units = 8000 + 5000 x 50 %

                        = 8000 + 2500 = 10500 units

18. Calucaltion of the direct labor cost per equivalent unit

Assuming the weighted average method.

units transfered = 127500 units

closing inventory = 20000 x 25 % = 5000 units

Total = 132500 units

Direct labor cost = $ 24000

Therefore direct labor cost per equivalent unit = 24000 / 132500

= $ 0.18 [option c]

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