Question

Camino Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 400 units. The costs and percentage completion of these units in beginning inventory were:

			Percent
			Complete
Materials costs		$      5,628	50%
Conversion costs		$      4,155	20%

A total of 6,800 units were started and 6,100 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:

Materials costs		$    28,140
Conversion costs		$    48,475

The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.

What are the cost per unit of material coming out of this department this month?

Answer 1

Final ANSWER	Cost per unit of material coming out of this department this month	4.80
	Working Note:
		Actual Units
	Calculation of Physical UNITS:
	Units in beginning inventory	400
	Units started during the period	6800
	Units to be accounted for	7200
		Actual Units	Equivalent Units
			Material	CC
	Units Completed and Transferred	6100	6100	6100
	Units in ending inventory	1100	935	825
	Total accounted for	7200	7035	6925
	Costs:
			Material	CC	Total
	Costs in beginning inventory		5628	4155	9783
	Cost added during the year		28140	48475	76615
	Total cost to account for		33768	52630	86398
	Equivalent Units from above		7035	6925
	Cost per equivalent unit		4.80	7.60