Question

At the beginning of the month, the Painting Department of Skye Manufacturing had 20,000 units in inventory, 70% complete as to materials, and 20% complete as to conversion. The cost of the beginning inventory, $28,650, consisted of $22,400 of material costs and $6,250 of conversion costs. During the month the department started 115,000 units and transferred 120,000 units to the next manufacturing department. Costs added in the current month consisted of $229,600 of materials costs and $540,500 of conversion costs. At the end of the month, the department had 15,000 units in inventory, 40% complete as to materials and 10% complete as to conversion. If Skye Manufacturing uses the weighted average method of process costing, compute the costs per equivalent unit of materials and conversion respectively for the Painting Department.
a. $2.00;$4.50
b. $1.82;$4.45
c. $2.05;$4.60
d. $2.05;$4.45
e. $2.25; $4.65

Answer 1

Answer:

a. $2.00; $4.50

Explanation:

Equivalent unit of material = 120,000 units + (15,000 units*40%)

Equivalent unit of material = 120,000 units + 6,000 units

Equivalent unit of material = 126,000 units

Cost per equivalent unit of material = ($22,400 + $229,600) / 126,000 unit

Cost per equivalent unit of material = $252,000 / 126,000 unit

Cost per equivalent unit of material = $2 per unit

Equivalent unit of conversion cost = 120,000 units + (15,000*10%)

Equivalent unit of conversion cost = 120,000 units + 1,500 units

Equivalent unit of conversion cost = 121,500 units

Cost per equivalent unit of conversion = ($6,250 + $540,500) / 121,500 units

Cost per equivalent unit of conversion = $546,750 / 121,500 units

Cost per equivalent unit of conversion = 4.50 per unit.