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Illusion [34]
3 years ago
14

During July, the production department of a process operations system completed and transferred to finished goods 10,000 units t

hat were in process at the beginning of July and 76,000 that were started and completed in July. July's beginning inventory units were 100% complete with respect to materials and 30% complete with respect to labor. At the end of July, 15,000 additional units were in process in the production department and were 100% complete with respect to materials and 25% complete with respect to labor. The beginning inventory included labor cost of $52,100 and the production department incurred direct labor cost of $450,750 during July. Compute the direct labor cost per equivalent unit for the department using the weighted-average method.
Business
1 answer:
sattari [20]3 years ago
7 0

Answer:

5.602786

Explanation:

Units completed:

= 100% of (76,000 + 10,000)

= 86,000

Closing units:

= 25% of 15,000

= 3,750

Equivalent units = Units completed + Closing units

                           = 86,000 + 3,750

                           = 89,750

Opening cost = 52,100

Cost during the year = 450,750

Total cost = Opening cost + Cost during the year

                = 52,100 + 450,750

                = 502,850

Direct labor cost per equivalent unit:

= Total cost ÷ Equivalent units

= 502,850 ÷  89,750

= 5.602786

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