Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the

Question

4 years ago

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Annenbaum Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the

first processing department consisted of 500 units. The costs and percentage completion of these units in beginning inventory were:
Cost Percent
Complete
Materials costs $ 5,800 65%
Conversion costs $ 6,900 45%
A total of 6,700 units were started and 6,000 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Cost
Materials costs $ 125,600
Conversion costs $ 207,100
The ending inventory was 50% complete with respect to materials and 35% 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. $18.42
B. $19.02
C. $19.91
D. $17.60

Business

1 answer:

ICE Princess25 [194] · Answer 1 · 2021-12-19T10:38:20+03:00

Answer:

The cost per equivalent unit for materials for the month in the first processing department is closest to C. $19.91

Explanation:

The Concept of Equivalent units expresses the number of units of outputs in terms of the completion status of the input resources in the process.

Step 1 Calculate the Number of Units of Ending Work In Process

Hint : Units in the Process must equal units out of the process

Units of Ending Work In Process = Units of Beginning Work In Process + Units Started during the Period - Units Completed and Transferred Out of the process

= 500+6700-6000

= 1,200

Step 2 Calculate the total material cost for the processing department

total material cost :

Opening Work In Process $ 5,800

Add Incurred During the Period $125,600

Total material cost $131,400

Step 3 Calculate total Equivalent Units in respect of Material Cost

Completed and Transferred Out ( 6,000 × 100%) 6,000

Ending Work In Process ( 1,200 × 50 %) 600

Total Equivalent Units 6,600

Step 4 Calculate the cost per equivalent unit for materials