QUESTION 2 The following information is available for Department C for the month
ID: 2560480 • Letter: Q
Question
QUESTION 2 The following information is available for Department C for the month of June Units ork in process, June 1 (70% complete) 10,000 S 36 18 24 Direct materials irect labor anufacturing overhead otal work in process, June 1 Started in production during June 40,000 sts added: Direct materials $108 48 irect labor anufacturing overhead otal costs added during June Work in process, June 30 (80% complete) 4,000 Materials are added at the be ginning of the process. Round unit costs to two decimal places. The unit cost for materials using the weighted average method is $2.70 $2.88 $3.12 $3.60Explanation / Answer
Correct Answer : $ 2.88
As materials are added at the beginning of the process, the degree of completion for materials would be 100% in computing equivalent units for ending WIP.
Total cost of materials = $ ( 36,000 + 108,000) = $ 144,000.
Cost of materials per equivalent unit = $ 144,000 / 50,000 = $ 2.88.
Production Degree of Completion Equivalent Units Completed and Transferred out 46,000 100 % 46,000 Ending WIP 4,000 100 % 4,000 50,000 50,000