Cost per Equivalent Unit The following information concerns production in the Fo

Question

Cost per Equivalent Unit

The following information concerns production in the Forging Department for September. All direct materials are placed into the process at the beginning of production, and conversion costs are incurred evenly throughout the process. The beginning inventory consists of $66,500 of direct materials.

a. Determine the number of units transferred to the next department.
units

b. Determine the costs per equivalent unit of direct materials and conversion. If required, round your answer to two decimal places.

c. Determine the cost of units started and completed in September.
$

ACCOUNT Work in Process—Forging Department ACCOUNT NO. Date Item Debit Credit Balance Debit Credit Sept. 1 Bal., 7,000 units, 50% completed 78,050 30 Direct materials, 64,000 units 588,800 666,850 30 Direct labor 93,990 760,840 30 Factory overhead 129,798 ? 890,638 30 Goods finished, ? units ? 30 Bal., 5,600 units, 70% completed ?

Explanation / Answer

Forging Department Details Units % Material Eq unit Material % Conversion Eq unit Conversion Sep 1 opening WIP              7,000 100%            7,000 50%              3,500 Units Started in Sep            64,000 100%         64,000            65,820 Total            71,000            69,320 Output   Goods Finished            65,400 100%         65,400 100%            65,400 Cloing WIP Sep 30              5,600 100%            5,600 70%              3,920 Total            71,000         71,000            69,320 a No of units transferred to the next department =         65,400 units b Cost Details Materials Conversion Total Opening WIP            66,500                 11,550         78,050 Incurred in Sep         588,800               223,788       812,588 Total           655,300               235,338       890,638 Equivalent Units produced            71,000                 69,320 Cost per Equivalent Unit $            9.23 $                  3.39 c Units started & Completed in Sep=65400-7000=         58,400 Cost Details Materials Conversion Total Units =58400         539,007               198,265       737,272

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