Eclypso Inc. manufactures a product that passes through two processes: mixing an
ID: 2555848 • Letter: E
Question
Eclypso Inc. manufactures a product that passes through two processes: mixing and molding. All manufacturing costs are added uniformly in the mixing department. Information for the mixing department for October is as follows: Work in process, October 1: Units (45% complete) 7,200 Direct materials $42,000 Direct labor $50,400 Overhead $14,400 During October, 38,400 units were completed and transferred to the molding department. The following costs were incurred by the mixing department during October: Direct materials $144,000 Direct labor $192,000 Overhead $60,000 By October 31, the 3,600 units that were 85% complete remained in mixing department. Eclypso uses the weighted average method. Which of the following is the total cost per equivalent unit of production? (Note: Round answer to two decimal places) a. $11.26 b. $12.13 c. $10.76 d. $8.52
Explanation / Answer
Total Equivalent units = Units completed and transfered + Equivalent units in ending WIP = 38400 + (3600 * 85%) = 38400 + 3060 = 41460
Total cost = Beginning inventory cost + Cost added during the month = (42000 + 50400 + 14400) + (144000 + 192000 + 60000) = 106800 + 396000 = 502800
Total Cost per Equivalent unit of production = 502800 / 41460 = $12.13
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