Question

The Plastic Flowerpots Company has two manufacturing departments, molding and packaging. At the beginning of the month, the molding department has 2,000 units in inventory, 70% complete as to materials. During the month, the molding department started 18,000 units. At the end of the month, the molding department had 3,000 units in ending inventory, 80% complete as to materials. Units completed in the molding department are transferred into the packaging department. Cost information for the molding department for the month follows:
Beginning work in process inventory (direct materials)​ $1,200
Direct materials added during the month​ $27,900
Using the weighted-average method, compute the molding department’s (a) equivalent units of production for materials and (b) cost per equivalent unit of production for materials for the month.
Direct Materials
A) Equivalent units of production
B) Cost per equivalent unit of production

Answer 1

Answer:

The Plastic Flowerpots Company

A) Equivalent units of production:

Started and completed = 17,600

Ending WIP =                     2,400

Total equivalent units = 20,000

B) Cost per equivalent unit of production:

Cost per equivalent unit = $27,900/20,000

= $1.40

Explanation:

a) Data:

Molding department:

Units started  = 18,000

Ending WIP = 3,000

Degree of completion = 80% for WIP

Cost:

Beginning WIP: Direct materials $1,200

Direct materials during the month = $27,900

a) Equivalent units of production for materials:

Beginning WIP = 2,000

Started               18,000

Ending WIP        (2,400) (80% of 3,000)

Completed        17,600

Started and completed = 17,600

Ending WIP =                     2,400

Total equivalent units = 20,000

b) Cost per equivalent unit of production for materials:

Cost of materials $27,900

Equivalent units = 20,000

Cost per equivalent unit = $27,900/20,000

= $1.395

= $1.40