Question

Link Company uses a process cost system and the weighted average method. During the year the company completed 1,300 units of product. Ending inventory consisted of 400 units that were 50% complete. The total dollar cost associated with production of inventory was $90,000. The cost per equivalent whole unit would be which of the following

Answer 1

Cost per equivalent unit: $60

Step-by-step explanation:

Cost per equivalent unit = (Cost of Beginning Work in Progress Inventory + Total production cost during the period) / Equivalent Units of Production (EUP)

Total Production Cost = $90,000

Equivalent Units of production (EUP) = 1,300 + 400 x 50% = 1,500 units

Cost per equivalent unit: $90,000 / 1,500 units = $60