Carmen Company uses weighted-average process costing to account for its producti
ID: 2442161 • Letter: C
Question
Carmen Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 735,000 units of product to finished goods. At the end of November, the goods in process inventory consists of 207,000 units that are 90% complete with respect to labor. Beginning inventory had $244,920 of direct materials and $69,098 of direct labor cost. The direct labor cost added in November is $1,312,852, and the direct materials cost addes is $1,639,080.Required
A) Determine the equivlant units of production with respect to (a) direct labor and (b) direct materials.
B) Compute both the direct labor cost and direct materials cost per equivlant unit.
C) Compute both direct labor cost and direct materials cost assigned to (a) units completed and transferred out, and (b) ending goods in process inventory.
Explanation / Answer
Material Labor a Started and Completed 735000 735000 Started ,not yet complete 207000 186300 (labor - 207,000 *90% ) Total Equivalent Units 942000 921300 b Beginning Inventory 244920 69098 Added in November 1639080 1312852 Total Cost 1884000 1381950 Cost per Equivalent Unit 2 1.5 c Assigned to completed units 1470000 1102500 Assigned to Closing WIP 414000 279450