Question

# Cost per Equivalent Unit The following information concerns production in the Forging Department for November. All...

Cost per Equivalent Unit

The following information concerns production in the Forging Department for November. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of \$100,430 of direct materials.

ACCOUNT Work in Process—Forging DepartmentACCOUNT NO.

DateItemDebitCreditBalance

DebitCredit

Nov.1Bal., 8,300 units, 70% completed  115,536

30Direct materials, 76,000 units896,800  1,012,336

30Direct labor88,260  1,100,596

30Goods finished, ? units  ?

30Bal., 6,600 units, 90% completed  ?

a. Determine the number of units transferred to the next department.
units

b. Determine the costs per equivalent unit of direct materials and conversion. If required, round your answer to two decimal places.

Cost per equivalent unit of direct materials\$

Cost per equivalent unit of conversion\$

c. Determine the cost of units started and completed in November.
\$

Solution

a.   the number of units transferred to the next department=8300+76000-6600

=77,700 units

b.   costs per equivalent unit :

Equivalent units;

 Whole units Direct material Conversion Inventory in process,Nov 1(70% complete) 8300 0 2490(8300×30%) Started and complete in Nov 69,400 (77,700-8300) 69,400 69,400 Transfer to finished good in Nov 77,700 69,400 71,890 Inventory in process, Nov 30 (90% complete) 6600 6600 5,940(6600×90%) Equivalent units 84,300 76,000 77,830

Cost per equivalent unit:

 Direct material Conversion Total costs for Nov. In Forgoing Department \$896,800 \$210,141 (88,260+121,881) Equivalent units 76,000 77,830 Cost per equivalent unit \$11.8 \$2.7

c. cost of units started and completed in November:

=\$1,006,300[69,400×(11.8+2.7)]

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