Question

Zia Co. makes flowerpots from recycled plastic in two departments, molding and packaging. At the beginning of the month, the molding department has 3,400 units in inventory, 70% complete as to materials. During the month, the molding department started 25,000 units. At the end of the month, the molding department had 5,100 units in ending inventory, 80% complete as to materials. Units completed in the molding department are transferred into the packaging department.Cost information for the molding department for the month follows:Beginning work in process inventory (direct materials) $ 2,600Direct materials added during the month 41,900Using the weighted-average method, compute the molding department’s (a) equivalent units of production for materials and (b) cost per equivalent unit of production for materials for the month. (Round "cost per equivalent unit of production" to 2 decimal places.)

Answer 1

Answer:

(a) equivalent units of production for materials

• total equivalent units = 24,320 units

(b) cost per equivalent unit of production for materials for the month.

• $1.83 per equivalent unit

Explanation:

total units = 3,400 (beginning WIP) + 25,000 (started) = 28,400

equivalent units in ending inventory = 5,100 units x 80% = 4,080

total equivalent units = total units - equivalent ending WIP = 28,400 - 4,080 = 24,320

total cost = beginning WIP + materials added = $2,600 + $41,900 = $44,500

cost per equivalent unit = $44,500 / 24,320 units = $1.8298 ≈ $1.83 per equivalent unit