Q12SE The Finishing Department reports... [FREE SOLUTION]

Chapter 18: Q12SE (page 1009)

The Finishing Department reports the following data for the month:
Equivalent unit of production:
Transferred in
3,000
Direct materials
3,000
Conversion cost
2,250
Costs:
Beginning WIP
Added this month
Total
Transferred in
$7,500
$15,000
$22,500
Direct materials
3,250
6,500
9,750
Conversion costs
6,125
13,000
19,125
Total
$16,875
$34,500
$51,375
Calculate the cost per equivalent units of production for each input. The company
uses the weighted-average method.

Short Answer

Expert verified

The cost per equivalent unit of production for transferred-in is $7.50, for direct materials is $3.25, and conversion cost is $8.5.

Step by step solution

Step-by-Step Solution:Step 1: Conversion Cost

Conversion cost is incurred by a company while manufacturing finished goods from the raw material. The Sum of direct labor and the manufacturing overhead cost is called conversion cost.

Cost per equivalent unit of production (EUP) for transferred in units

$Cost per EUP for transferred in = \frac{Total cost of transferred in units}{Equivalent units of production for transferred in} = \frac{$ 22, 500}{3, 000} = $ 7.5$

Cost per equivalent unit of production for direct materials

$Cost per EUP for Direct materials = \frac{Total directmaterial costs}{Equivalent units of production for Directmaterial} = \frac{$ 9, 750}{3, 000} = $ 3.25$

Cost per equivalent unit of production for conversion cost

$Cost per EUP for Conversion costs = \frac{Total Conversion costs}{Equivalent units of production for conversion costs} = \frac{$ 19, 125}{2, 250} = $ 8.50$

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	Beginning WIP	Added this month	Total
Direct materials	\(500	\)2,000	\(2,500
Conversion cost	1,250	5,450	6,700
Total	\)1,750	\(7,450	\)9,200

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Short Answer

Step by step solution

Step-by-Step Solution:Step 1: Conversion Cost

Cost per equivalent unit of production (EUP) for transferred in units

Cost per equivalent unit of production for direct materials

Cost per equivalent unit of production for conversion cost

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Transferred in	3,000
Direct materials	3,000
Conversion cost	2,250

Costs:	Beginning WIP	Added this month	Total
Transferred in	\(7,500	\)15,000	\(22,500
Direct materials	3,250	6,500	9,750
Conversion costs	6,125	13,000	19,125
Total	\)16,875	\(34,500	\)51,375