Domingo Corporation uses the weighted-average method in its process costing system. This month, the beginning inventory in the first processing department consisted of 1,100 units. The costs and percentage completion of these units in beginning inventory were: Cost Percent Complete
Materials costs $ 6,200 50%
Conversion costs $ 2,400 20%
A total of 7,500 units were started and 6,800 units were transferred to the second processing department during the month. The following costs were incurred in the first processing department during the month:
Cost
Materials costs $ 159,400
Conversion costs $ 121,100
The ending inventory was 85% complete with respect to materials and 75% complete with respect to conversion costs.
The cost per equivalent unit for materials for the month in the first processing department is closest to:.
a. $18.82
b. $18.57
c. $18.05
d. $19.88

Domingo Corporation

The cost per equivalent unit for materials for the month in the first processing department is closest to:.

d. $19.88

Explanation:

a) Data and Calculations:

Beginning inventory = 1,100

Cost Percent Complete

Materials costs $ 6,200 50%

Conversion costs $ 2,400 20%

                                                      Units    Materials  Conversion

Work in process, beginning          1,100        50%            20%

Started into production               7,500

Completed and transferred out 6,800       100%           100%

Work in process, ending             1,800         85%            75%

Cost of production:

                                                     Materials    Conversion

Work in process, beginning           $6,200         $2,400

Cost added during June            $159,400        $121,100

Total cost of production             $165,600      $123,500

Equivalent units of production:

                                                     Units  Materials         Conversion

Completed and transferred out 6,800    6,800 (100%)    6,800 (100%)

Work in process, ending             1,800     1,530 (85%)       1,350 (75%)

Total equivalent units                               8,330                 8,150

Cost per equivalent unit:

                                                    Materials    Conversion

Total cost of production             $165,600      $123,500

Total equivalent units                       8,330             8,150

Cost per equivalent unit              $19.88         $15.15

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