Question

In the current period, Forward Co. started with the production of 21,000 units and completed 8,400 units, leaving 13,200 units in process that are 42% complete. If Forward Co. incurred production costs of $34,980, what was Forward's cost per equivalent unit for the period

Answer 1

To calculate the cost per equivalent unit for Forward Co., the number of incomplete units is multiplied by their percentage of completion, and this number is added to the completed units to get total equivalent units. Total production costs are divided by total equivalent units to find the cost per equivalent unit, which is approximately $2.51.

Step-by-step explanation:

The student's question is about calculating the cost per equivalent unit for Forward Co. given the incomplete production units and the percentage of completion. To find the equivalent units of production, we multiply the number of incomplete units by their percentage of completion. Then, we add this to the number of completed units to find the total equivalent units. To determine the cost per equivalent unit, we divide the total production costs by the total equivalent units.

Let's calculate:

• Incomplete units = 13,200 units
• Percentage of completion = 42%
• Equivalent units for incomplete production = 13,200 units * 42% = 5,544 units
• Total completed units = 8,400 units
• Total equivalent units = 8,400 units + 5,544 units = 13,944 units
• Total production costs = $34,980
• Cost per equivalent unit = Total production costs / Total equivalent units
• Cost per equivalent unit = $34,980 / 13,944 units ≈ $2.51 per unit

Therefore, the cost per equivalent unit for Forward Co. for the period is approximately $2.51.

Answer 2

$2.51 per unit

Step-by-step explanation:

The computation of the cost per equivalent unit is shown below:

But before that the equivalent units is to be computed

Equivalent units = units completed + equivalents units in ending inventory

= 8,400 units + (13,200 units × 42%)

= 13,944 units

Now

Cost per equivalent unit = cost incurred ÷ equivalent units

= $34,980 ÷ 13,944 units

= $2.51 per unit