Which production characteristic would make process costing appropriate? Costs tr

Question

Which production characteristic would make process costing appropriate? Costs tracked for each job Continuous production Production with unique orders Different requirements from each customer The following information is provided for a company: Equivalent units in 6,000 for materials and 5,000 for conversion Cost of beginning work in process included $12,000 of materials and $8,000 of conversion Cost added during the period included $85, 200 of materials and $64,000 of conversion What is the total cost per equivalent unit using the weighted average process method? $15.38 $27.00 $30.60 $30.76

Explanation / Answer

For material:

Total cost = 12000+85200 = $97200

Cost per unit = $97200/6000 = $16.2

For conversion:

Total cost = 8000+64000 = $72000

Cost per unit = $72000/5000 = $14.4

Total cost per equivalent unit is = 16.2 + 14.4 = $30.60

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