Question

A firm uses a weighted-average process costing system. Direct materials and conversion costs are incurred evenly during the production process. During the month of October, the following costs were incurred:Direct materials $39,700Conversion costs 70,000The work-in-process inventory as of October 1 consisted of 5,000 units, valued at $4,300, that were 20% complete. During October, 27,000 units were transferred out. Inventory as of October 31 consisted of 3,000 units that were 50% complete. The weighted-average inventory cost per unit completed in October was

Answer 1

Cost Per Unit Completed = $4.07

Step-by-step explanation:

Materials & Conversion

Beginning WIP Cost $4,300

Cost added in the period $109,700

Total Cost of the Units $114,000

Equivalent Units of Production (EUP): Completed Units + Ending WIP Units

EUP Materials & Conversion= 27,000 + 5,000 x 20% = 28,000

Cost per Equivalent Unit: Cost of Units / EUP

Cost per EUP Materials & Conversion: $114,000 / 28,000 = $4.07