Question

Excellent, Inc., incurred total production costs of $116,250 for the manufacture of speakers in the month of May and had the following equivalent units schedule:

Units completed1,350 unitsUnits in ending work in process (EWIP) × Fraction complete:500 units × 0.40200 unitsEquivalent units1,550 units
Calculate the cost of manufacturing one speaker for May.

Answer 1

The cost of manufacturing one speaker for Excellent, Inc. in May is calculated by dividing the total production costs of $116,250 by the equivalent units of 1,550, resulting in a cost of $75 per speaker.

Step-by-step explanation:

To calculate the cost of manufacturing one speaker for May at Excellent, Inc., we use the total production costs and the equivalent units of production. First, we divide the total production costs of $116,250 by the equivalent units which total 1,550 units. This will give us the cost per equivalent unit or the cost per speaker.

The calculation is as follows:

$116,250 total production costs ÷ 1,550 equivalent units = $75 cost per speaker

Therefore, the cost of manufacturing one speaker in the month of May is $75.