During December, the production department of a process operations system comple

Question

During December, the production department of a process operations system completed and transferred to finished goods a total of 65,000 units of product. At the end of March, 15,000 additional units were in process in the production department and were 80% complete with respect to materials. The beginning inventory included materials cost of $57,500 and the production department incurred direct materials cost of $183,000 during December. Compute the direct materials cost per equivalent unit for the department using the weighted-average method.

Explanation / Answer

Answer:

Que 14 Answer:

Cost per equivalent unit for direct materials

= (Beginnning WIP cost + Current period cost) / (Equivalent units completed and transferred out + Equivalent units in Ending WIP

= [ 57,500 + 183,000 ] / [ 65,000 + (15000*80%) ] = 240,500 / 77,000 = $3.12.

Answer: d) $3.12

Que 15 answer:

Equivalent units for the month = Equivalent units completed and transferred + Equivalent units in Ending WIP

= 8,000 + (5,000*50%) = 10,500 units.

Answer: e) 10,500 units.

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