The Plastic Flowerpots Company has two manufacturing departments, molding and pa

Question

The Plastic Flowerpots Company has two manufacturing departments, molding and packaging. At the beginning of the month, the molding department has 3,200 units in inventory, 70% complete as to materials. During the month, the molding department started 24,000 units. At the end of the month, the molding department had 4,800 units in ending inventory, 80% complete as to materials. Units completed in the molding department are transferred into the packaging department.
Cost information for the molding department for the month follows:

Beginning work in process inventory (direct materials) $ 2,400 Direct materials added during the month 39,900
Using the weighted-average method, compute the molding department’s (a) equivalent units of production for materials and (b) cost per equivalent unit of production for materials for the month. (Round "cost per equivalent unit of production" to 2 decimal places.)

Explanation / Answer

Units transferred out = 3200+24000-4800 = 22400 Units

a) Equivalent unit of production = 22400+(4800*80%) = 26240 Units

b) Cost per equivalent unit of production = (2400+39900)/26240 = $1.61

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