Hutchinson Corp. uses the weighted-average method in its process costing system.

ID: 2487726 • Letter: H

Question

Hutchinson Corp. uses the weighted-average method in its process costing system. This month the beginning inventory in the first processing department consisted of 675 units. The costs and percentage completion of these units in beginning inventory were:

Cost: Percent Complete:

Materials: 8,800 75%

Conversion: 5,400 35%

A total of 7,900 units were started and 6,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department:

Materials: 95,000

Conversion: 180,700

The ending inventory was 80% complete with respect to materials and 70% complete with respect to conversion costs. The cost per equivalent unit for materials for the month in the first processing department is closest to:

A. $12.74

B. $13.92

C. $13.39

D. $12.10

Explanation / Answer

Beginning WIP

675

Completed

6,700

Total started

7,900

Ending WIP

1,875

Units to be accounted

8,575

Equivalent units for materials

Completed and transferred 6,700

Ending WIP 1,875@80% 1,500

Equivalent units 8200 units

Cost

Beginning wip 8,800

Added during the year 95,000

Total cost $103,800

Cost per unit 103,800/8200 = 12.65

(Do you have none of these option as well if not go with 12.74 , though I am sure I have worked the problem correct but I don’t see the answer in options)