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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 (70% complete) 90,000 Started in November 1,020,000 Completed in November and transferred out 960,000 Ending work in process (40% complete) 150,000 Cost data for November show the following. Beginning WIP inventory Direct materials costs $ 35,670 Conversion costs 110,630 Current period costs Direct materials costs $ 408,330 Conversion costs 1,521,370 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.

Respuesta :

Answer:

a. Cost per equivalent units for the conversion cost  =$ 1.6

b. Cost per equivalent unit for materials= $ 0.4

Explanation:

Campo Company

Particulars            Units           % of Completion         Equivalent Units

                                                 Mat. Conversion       Materials   C. Costs

Transferred out, 960,000          100         100          960,000    960,000

+Ending inventory, 150,000        100        40            150,000     60,000

Total Equivalent Units                                                1110,000     1020,000

1)We first the total equivalent units and then the total costs.

                                                     Materials      Conversion Costs

Beginning WIP inventory             $ 35,670          $ 110,630

Current period costs                  $ 408,330         $ 1,521,370

Total Costs                                 $ 444,000         $ 1632,000

2) We divide the total costs of materials and conversion with the total equivalent units of materials and conversion to get the unit cost.

a. Cost per equivalent units for the conversion cost  =$ 1632,000/1020,000

= $ 1.6

b. Cost per equivalent unit for materials= $ 444,000/ 1110,000 =$ 0.4