Question

Materials are added at the beginning of the production process at Campo Company. The following information on the physical flow of units is available for the month of November. Beginning work in process (70% complete) 90,000 Started in November 1,020,000 Completed in November and transferred out 960,000 Ending work in process (40% complete) 150,000 Cost data for November show the following. Beginning WIP inventory Direct materials costs $ 35,670 Conversion costs 110,630 Current period costs Direct materials costs $ 408,330 Conversion costs 1,521,370 Required: a. Compute the cost equivalent units for the conversion cost calculation assuming Campo uses the weighted-average method. b. Compute the cost per equivalent unit for materials and conversion costs for November.

Answer 1

The cost equivalent units for conversion costs using the weighted-average method in November were 1,020,000. The cost per equivalent unit for materials was $0.40, and for conversion costs was $1.49.

Step-by-step explanation:

To calculate the cost equivalent units for conversion costs using the weighted-average method, we need to consider the units that were started and completed in November, as well as the units still in process at the end of November.

For the units completed: 960,000 units x 100% = 960,000 equivalent units

For the units in ending work in process: 150,000 units x 40% = 60,000 equivalent units

The total cost equivalent units for conversion costs would be 960,000 + 60,000 = 1,020,000 equivalent units.

The cost per equivalent unit for materials can be calculated by dividing the total materials costs by the cost equivalent units.

For November: $408,330 / 1,020,000 = $0.40 per equivalent unit for materials.

The cost per equivalent unit for conversion costs can be calculated by dividing the total conversion costs by the cost equivalent units.

For November: $1,521,370 / 1,020,000 = $1.49 per equivalent unit for conversion costs.