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 50,000 units. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 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 $24,000 and overhead costs of $32,000 for the period. The direct labor cost per equivalent unit is:
A)
$0.128.
B)
$0.160.
C)
$0.178.
D)
$0.295.
E)
$0.373.

Explanation / Answer

DL: $24,000 Beg Inventory: 50,000 Started and finished: 127,500 Ending Inventory: 40,000 (1/4 complete) = 10,000 units completed $24,000 / (50,000+127,500+.25*40,000) = 0.128

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