Question

A company uses a process cost accounting system and the weighted-averaage inventory valuation method. Its Assembly Department's beginning inventory consisted of 50,000 units, three-fourths complete with respect to direct labor and overhead. The department started and finished 127,500 units this period. The ending inventory consists of 40,000 units that are one-fourth complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. Goods in Process included direct labor costs of $30,000 and overhead costs of $40,000 for the period. The overhead cost per equivalent unit is:A. $0.126B. $0.160C. $0.178D. $0.213E. $0.373

Answer 1

Answer:

E. $0.373

Explanation:

beginning WIP + started and complete + ending WIP

50,000+127,500+10,000=187,500

for weighed average method we put the beginning inventory and the units started during the period together

conversion cost = labor cost + overhead cost

30,000+40,000=70,000 total conversion cost

unit cost 70,000/187,500= 0.3733333