Abis Corporation uses the weighted-average method in its process-costing system.
ID: 2381650 • Letter: A
Question
Abis Corporation uses the weighted-average method in its process-costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were
A total of 9,200 units were started, and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that's the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
Abis Corporation uses the weighted-average method in its process-costing system. This month, the beginning inventory in the first processing department consisted of 800 units. The costs and percentage completion of these units in beginning inventory were
Cost Percent Complete Material costs $6,000 50% Conversion costs $9,900 30%A total of 9,200 units were started, and 8,200 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost Material costs $113,900 Conversion costs $322,500The ending inventory was 80% complete with respect to materials and 20% complete with respect to conversion costs.
Note: Your answers may differ from those offered below due to rounding error. In all cases, select the answer that's the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places.
13. The cost per equivalent unit for materials for the month in the first processing department is closest to A. $11.99. B. $12.44. C. $11.82. D. $11.39.
Explanation / Answer
The number of units at the beginning of the month is 800, and 9,200 were started during the month, which is a total of 10,000. Of the 10,000, 8,200 were completed and transferred out, which is 8,200 equivalent units. The remaining 1,800 that were left were 80% complete with respect to materials. This is 1,800*0.8 = 1,440 equivalent units for materials.
The total equivalent units for materials for the month is 8,200 + 1,440 = 9,640.
Beginning costs for materials were 6,000. Material costs incurred during the month were 113,900. This totals 6,000 + 113,900 = 119,900.
So the cost per equivalent unit for materials for the month is $119,900/9,640 = $12.44.
Answer: B, $12.44