Tesla Corporation, which adds materials at the beginning of production, uses a w

Question

Tesla Corporation, which adds materials at the beginning of production, uses a weighted-average process-costing system. Consider the data that follow.

The company's cost per equivalent unit for materials is:

Multiple Choice

None of these.

$2.67.

$2.28.

$1.93.

$1.45.

2)

Peach Company uses a weighted-average process-costing system. Company records disclosed that the firm completed 49,000 units during the month and had 14,800 units in process at month-end, 40% complete. Conversion costs associated with the beginning work-in-process inventory amounted to $287,000, and amounts that relate to the current month totaled $974,000. If conversion is incurred uniformly throughout manufacturing, Peach's equivalent-unit cost is:

Multiple Choice

$19.88.

None of these.

$17.46.

$22.96.

$18.40.

Number
of Units Cost
of Materials Beginning work in process 42,600 $ 82,700 Started in June 68,900 215,000 Production completed 75,300 Ending work in process 36,200  

Explanation / Answer

1) Equivalent unit of material = 75300+(36200*100%) = 111500 units

Cost per equivalent unit of material = (82700+215000)/111500 = 2.67 per unit

so answer is b) $2.67

2) Equivalent unit of conversion = 49000+(14800*40%) = 54920 units

Cost per equivalent unit of conversion = (287000+974000)/54920 = 22.96

so answer is d) $22.96

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