16 Esty Corporation uses the weighted average method in its process costing syst

Question

16 Esty Corporation uses the weighted average method in its process costing system. Thes month, the beginning inentory in the frcg depament consisted of 800 units. The costs and percentage completion of these units in beginning inverory were Perc Cost 5, 800 $6,500 Materials costs A total of 7,700 units were started and 6,500 unts were transferred to the second processing department duning the month. The following coms were incurred in the first processing department during the month Materials costs Conversion costs $ B5,30 $168,000 The ending inventory was 70% complete with respect to materials and tos compete wen respect to conversion costs The cost per equivalent unit for materials for the month in the frst grocessing department is closest to

Explanation / Answer

Calcultion of equivalent units under weighted average method

Opening units = 800*

transferred units = 6600

Closing units = 1330 ( 1900*70%)

Total equivalent units poduced = 6600 + 1330 = 7930

Total Cost = 5800 + 85300 = 91100

Cost per unit = 91100 /  7930 = 11.488

Correct answer is (a)

* opening units has been included in transferred units (800 + 5800). 50% completed in opening is irrelevant in weighted average cost method, but it is relevant in FIFO method because Cost of 50% has been included in current year which is already completed in earlier year. if we are consideing the cost then % of completion will also be consider.

Related Questions

Navigate

• Browse (All)
• Browse 1
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.