Cost per Equivalent Unit: Average Cost Method The following information concerns
ID: 2555736 • Letter: C
Question
Cost per Equivalent Unit: Average Cost Method
The following information concerns production in the Forging Department for April. The Forging Department uses the average cost method.
ACCOUNT Work in Process—Forging Department ACCOUNT NO.
Date Item Debit Credit Balance Debit Credit
April 1 Bal., 2,900 units, 30% completed 13,511
30 Direct materials, 67,000 units 495,800 509,311
30 Direct labor 209,600 718,911
30 Factory overhead 114,900 833,811
30 Goods transferred, 66,600 units ? ?
30 Bal., 3,300 units, 70% completed ?
a. Determine the cost per equivalent unit. Round your answer to the nearest cent. $ per equivalent unit
b. Determine the cost of the units transferred to Finished Goods. $
c. Determine the cost of units in ending Work in Process. $
Explanation / Answer
Equivalent unit = 66600+(3300*70%) = 68910 unit
Cost per equivalent unit = 833811/68910 = 12.10 per equivalent unit
Cost of units transferred out = (66600*12.10) = 805860
Cost of ending work in process = (3300*70%*12.10) = 27951