Answer:
Part a.
Equivalent units : Materials = 30,000 units ,Conversion Costs = 28,000 units
Cost per equivalent unit : Materials = $6.25 Conversion Costs = $5.85
Part b.
$314,600
Part c.
$36,700
Explanation:
Step 1 : Equivalent units
<u>Materials</u>
Units Completed and Transferred (26,000 x 100 %) 26,000
Units in Ending Work in Process (4,000 x 100%) 4,000
Equivalent units with respect to Materials 30,000
<u>Conversion Costs</u>
Units Completed and Transferred (26,000 x 100 %) 26,000
Units in Ending Work in Process (4,000 x 50%) 2,000
Equivalent units with respect to Materials 28,000
Step 2 : Cost per equivalent unit
Materials = $187,500 ÷ 30,000 = $6.25
Conversion Costs = $163,800 ÷ 28,000 = $5.85
Total unit cost = $6.25 + $5.85 = $12.10
Step 3 : Costs of units completed and transferred to the testing department
Costs of units completed and transferred = 26,000 x $12.10 = $314,600
Step 4 : Costs of the ending work-in-process
Costs of the ending work-in-process = 4,000 x $6.25 + 2,000 x $5.85 = $36,700
