Question

Photo Frame Company had beginning Work in Process inventory of 1,200 units. There were 3,300 units of product started during the period. Ending Work in Process inventory consisted of 1,500 units that were 50% complete. The total dollar cost associated with production of inventory was $88,000. The cost per equivalent whole unit would be which of the following
A. $51
B. $34
C. $45
D. $37

Answer 1

Answer:

$23.47

Explanation:

Given that,

Beginning Work in Process inventory = 1,200 units

Units started = 3,300 units

Ending Work in Process = 1,500 units

Total dollar cost = $88,000

Finished units:

= Beginning Work in Process inventory + Units started - Ending Work in Process

= 1,200 units + 3,300 units - 1,500 units

= 3,000 units

Equivalent units:

= (Finished units × 100%) + (Ending Work in Process × 50%)

= (3,000 × 100%) + (1,500 × 50%)

= 3,000 units + 750 units

= 3,750 units

Cost per equivalent whole unit:

= Total dollar cost ÷ Equivalent units

= $88,000 ÷ 3,750

= $23.47