A company uses process costing, and uses the weighted average method to account

Question

A company uses process costing, and uses the weighted average method to account for costs. The beginning inventory consisted of $697,000 of costs transferred in from the previous department., $186,000 of direct materials, and $393,000 of conversion costs.

During the month, the cost of units transferred in was $1,257,000. Direct materials of $743,000 were added as well as $816,000 of conversion costs.

The equivalent units transferred in was 118,000. The equivalent units for direct materials was 110,800. The equivalent units for conversion costs was 115,600.

What is the cost per equivalent unit (rounded to the nearest cent) for:

Transferred-in?

Direct materials?

Conversion costs?

Total costs?

Explanation / Answer

Cost per equivalent unit (rounded to the nearest cent) is calculated as under:

Cost per equivalent unit-Weighted Average Month ended XXXX Equivalent Units Transferred In Direct material Conversion Cost Total Beginning WIP 6,97,000 1,86,000 3,93,000 12,76,000 Cost added during March 12,57,000 7,43,000 8,16,000 28,16,000 Total Cost 19,54,000 9,29,000 12,09,000 40,92,000 Total Equivalent Units 118000 110800 115600 Cost per equivalent units 17 8 10

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