Question

During March, the production department of a process operations system completed and transferred to finished goods 27,000 units that were in process at the beginning of March and 190,000 units that were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 60% complete with respect to labor. At the end of March, 27,000 additional units were in process in the production department and were 100% complete with respect to materials and 45% complete with respect to labor. The production department incurred direct materials cost of $253,700 and its beginning inventory included materials cost of $93,800. Compute the direct materials cost per equivalent unit for the department using the weighted-average method. $1.37. $1.42. $1.83. $1.60. $1.34.

Answer 1

• Correct Answer = Option #4: $ 1.60
• Working

EUP - Weighted Average Method	Units	% Material	EUP Materials
Units TRANSFERRED	190,000	100%	190,000
Units of ENDING WIP	27,000	100%	27,000
Equivalent Units of Production			217,000
COST per EUP			Material
Cost of Beginning WIP			$          93,800.00
Cost incurred during the period			$        253,700.00
Total Costs		Costs	$        347,500.00
Equivalent units of production		EUP	217,000
Cost per EUP			$              1.60138 or $ 1.60