Question

Whitney Company had no units in process at the beginning of the month. During the month 8,000 new units were started, 6,000 of these were completed but 2,000 were still in process at the end of the month. The units still in process were 100% complete as to materials but only 30% complete as to conversion costs. The cost of materials used in production during the month was $20,800 and the costs of labor and overhead were $30,360. If Whitney Company uses process costing, the total cost of making a unit of product during this month rounded to the nearest cent is:

Answer 1

$7.20

Step-by-step explanation:

Units % Mat. EUP- Mat. % Conv. EUP- Conv.

Units completed & 6000 100% 6000 100% 6000

transferred out

Units in ending inventory 2000 100% 2000 30% 600

Equivalent units of production 8000 6600

Cost per Equivalent Unit of Production

Materials Conversion Total

Beginning costs - - -

During the month costs $20,800 $30,360

Total cost $20,800 $30,360

÷ Equivalent units of production 8.000 6,600

Cost per equivalent unit $2.60 $4.60 $7.20

of production