Question

Inacio Corporation uses the weighted-average method in its process costing system. Data concerning the first processing department for the most recent month are listed below: Beginning work in process inventory: Units in beginning work in process inventory900 Materials costs$ 13,000 Conversion costs$ 5,100 Percent complete with respect to materials75% Percent complete with respect to conversion20% Units started into production during the month9,600 Units transferred to the next department during the month8,500 Materials costs added during the month$ 172,100 Conversion costs added during the month$ 242,100 Ending work in process inventory: Units in ending work in process inventory2,000 Percent complete with respect to materials90% Percent complete with respect to conversion30% The cost per equivalent unit for materials for the month in the first processing department is closest to:

Answer 1

Answer:

$17.97 per unit

Explanation:

Using weighted average method, Equivalent units = Units that are completed during the period + Equivalent units in process at the end of period.

Equivalent units = 8,500 + 2,000*90%

Equivalent units = 8,500 + 1,800

Equivalent units = 10,300

Cost per equivalent unit for materials = (Beginning costs + Current costs) / Equivalent units

Cost per equivalent unit for materials = ($13,000 + $172,100) / 10,300 units

Cost per equivalent unit for materials = $185,100 / 10,300 units

Cost per equivalent unit for materials = $17.97 per unit