Question

The following information is available for Department C for the month of June: Units Cost WIP{, June 1 (70% complete) 10,000 ​Direct materials $ 36,000 Direct labor 18,000 Manufacturing overhead 24,000 Total work in process, June 1 $78,000 Started during June 40,000 Costs added: ​Direct materials $108,000 Direct labor 48,000 Manufacturing overhead 60,600 Total costs added during June $216,000 WIP, June 30 (80% complete) 4,000 Materials are added at the beginning of the process. Round unit costs to two decimal places. The cost per equivalent unit of production for materials using the weighted average method is​

a. $3.12.
b. $2.70.
c. $2.88
d. $3.60.

Answer 1

The cost per equivalent unit of production for materials in Department C using the weighted average method is $2.88.

Step-by-step explanation:

The question asks to calculate the cost per equivalent unit of production for materials for Department C using the weighted average method. To determine the cost per equivalent unit, we first calculate the total cost of materials by adding the cost of direct materials in the WIP at the beginning of the period to the costs added during the period. The total cost of materials is $36,000 + $108,000 = $144,000. Since materials are added at the beginning of the process, all units, including those in the beginning work in the process and those started during the period, are 100% complete concerning materials.

Therefore, the total equivalent units for materials are the sum of the beginning units (10,000) and the units started (40,000), which is 50,000 units. Finally, we calculate the cost per equivalent unit for materials by dividing the total cost of materials by the total equivalent units for materials ($144,000 ÷ 50,000), giving us $2.88 per equivalent unit for materials.