Chae Corporation uses the weighted-average method in its process costing system.
ID: 2421461 • Letter: C
Question
Chae Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 720 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete Materials costs $8,100 70% Conversion costs $7,100 20% A total of 8,300 units were started and 7,700 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month: Materials costs $138,100 Conversion costs $324,100 The ending inventory was 70% complete with respect to materials and 65% 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 is the closest to the answer you computed. To reduce rounding error, carry out all computations to at least three decimal places. The cost per equivalent unit for materials for the month in the first processing department is closest to:
Explanation / Answer
The cost per equivalent unit for materials for the month in the first processing department is closest to $16.95 Particulars Direct Materials %completion Equivalent mat Conversion %completion Equivalent mat Opening WIP 720.00 100% 720.00 720.00 100% 720.00 Units started and completed(7700-720) 6,980.00 100% 6,980.00 6,980.00 100% 6,980.00 Closing WIP = 8300 - 6980 1,320.00 70% 924.00 1,320.00 65% 858.00 Equivalent Units 8,624.00 8,558.00 Opening WIP costs 8,100.00 7,100.00 Current Month Costs 138,100.00 324,100.00 Total costs 146,200.00 331,200.00 Cost per Equivalent units 16.95 38.70