Question

Materials are added at the beginning of the production process at Campo Company. The following information on the physical flow of units is available for the month of November.

Beginning work in process (58% complete)	65,000
Started in November	590,000
Completed in November and transferred out	565,000
Ending work in process (70% complete)	90,000

Cost data for November show the following.

Beginning WIP inventory
Direct materials costs	$	27,300
Conversion costs		55,700
Current period costs
Direct materials costs	$	340,950
Conversion costs		1,219,550

Required:

a. Compute the cost equivalent units for the conversion cost calculation assuming Campo uses the weighted-average method.

b. Compute the cost per equivalent unit for materials and conversion costs for November.

Answer 1

Required 1 :
	Materials	Conversion
Units transferred	565000	565000
(+) Ending inventory equivalent units [ Ending inventory units * % Completion ]	90000	63000
Equivalent units of production	655000	628000

Equivalent units for conversion cost

628000

Required 2 :
	Materials	Conversion
Beginning work in process cost	27300	55700
(+) Current period costs	340950	1219550
Total cost	368250	1275250
(/) Equivalent units of production	655000	628000
Cost per equivalent unit	0.56	2.03

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