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14. Willow Corp uses a process costing system. Beginning inventory for January consisted of 1,000 units...

14. Willow Corp uses a process costing system. Beginning inventory for January consisted of 1,000 units that were 60% completed. During January, 10,500 units were completed. On January 31, the inventory consisted of 500 units that were 70% completed. How many units were started during January?

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Maplewood Co. uses process costing to account for the production of canned energy drinks. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $7,000 in materials and $4,000 in conversion costs. April costs were $36,000 for materials and $40,000 for conversion costs. During April 8,000 units were completed. Ending in process inventory was 4,000 units (100% complete for materials, 50% for conversion). The cost per unit using the weighted average method would be

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Answer #1

Willow corp.:-

As we know that :-

Opening inventory + units started = Units completed + Closing Inventory

1000 + units started = 10500 + 500

units started = 10000 units

Maplewood Co.:-

Equivalent units for materials = Units completed ( 8000 units * 100 % ) + Closing Inventory ( 4000 units * 100 % ) = 12000 units

Equivalent units for conversion costs = Units completed ( 8000 units * 100 % ) + Closing Inventory ( 4000 units * 50 % ) = 10000 units

Cost per unit ( materials ) = ( 7000 + 36000 ) / 12000 = $ 3.583

Cost per unit ( conversion costs ) = ( 4000 + 40000 ) / 10000 = $ 4.4

The cost per unit using the weighted average method would be  $ 3.583 + $ 4.4 = $ 7.983 ( answer )

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