The debits to Work in Process - Assembly Department for April, together with dat

Question

The debits to Work in Process - Assembly Department for April, together with data concerning production, are as follows: April 1, work in process: Materials cost, 3,000 units $8,847 Conversion costs, 3,000 units, 2/3 completed $5,738 Materials added during April, 10,000 units $26,272 Conversion costs during April $30,282 Goods finished during April, 11,500 units - - - April 30 work in process, 1,500 units, 1/2 completed - - - All direct materials are placed in process at the beginning of the process and the average cost method is used to cost inventories. What is the cost per equivalent unit (to the nearest cent) for April?

Select the correct answer.

$3.03

$2.28

$2.63

$2.70

Explanation / Answer

Equivalent units for material = Units completed and transferred + [Units in closing WIP x Percentage of completion]

= 11500 + [1500 x 100%]

= 13000

Equivalent units for coversion cost = Units completed and transferred + [Units in closing WIP x Percentage of completion]

= 11500 + [1500 x 50%]

= 12250

Cost per equivalent unit for material = (8847+26272)/13000 = $2.70

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