Question

Parkway Company incurred $126,000 in material costs during July. Additionally, the 12,000 units in the Work-in-Process Inventory on July 1 had materials assigned to them of $32,000, even though they were only 5% complete as to materials. No additional units were started during July, and there were no unfinished units on hand on July 31. What is the material cost per equivalent unit for July, assuming Parkway uses weighted-average process costing

Answer 1

Answer:

$ 13.167 / unit

Explanation:

Data provided:

Beginning material cost = $ 126,000

Number of units in work in progress = 12,000 units

Material cost assigned = $ 32,000

thus,

the total material cost involved = $ 126,000 + $ 32,000 = $ 158,000

Now,

the material cost per equivalent unit = Total material cost involved / number of units

on substituting the values, we have

the material cost per equivalent unit = $ 158,000 / 12,000

or

= $ 13.167 / unit