Question

Sparky Corporation uses the weighted-average method of process costing. The following information is available for February in its Molding Department: Units: Beginning Inventory: 43,000 units, 100% complete as to materials and 60% complete as to conversion. Units started and completed: 146,000. Units completed and transferred out: 189,000. Ending Inventory: 39,000 units, 100% complete as to materials and 30% complete as to conversion. Costs: Costs in beginning Work in Process - Direct Materials: $61,000. Costs in beginning Work in Process - Conversion: $66,850. Costs incurred in February - Direct Materials: $409,400. Costs incurred in February - Conversion: $617,150. Calculate the cost per equivalent unit of materials.

Answer 1

Answer: $2.06

Explanation:

Material Cost in Beginning work in process = $61,000

Material cost incurred in February for materials = $409,400

Total Material cost = 61,000 + 409,400

= $470,400‬

Units completed and transferred out were 189,000.

Ending inventory is 39,000 and 100% complete in relation to materials so will count towards materials.

Equivalent Material units = 189,000 + 39,000

= 228,000 units

Cost per equivalent unit of materials = Total material cost/ Equivalent Material units

= 470,400/228,000

= $2.06