(Appendix 4A) Owens Corporation uses a process costing system. For March, the beginning work in process inventory consisted of 60,000 units that were 60% complete with respect to processing. The ending work in process inventory for the month consisted of units that were 20% complete with respect to processing. A summary of unit and cost data for the month follows:

-Assuming that Owens Corporation uses the weighted-average method,which of the following is closest to the cost per equivalent unit for processing cost for March?
A) $4.08
B) $3.87
C) $3.68
D) $3.50

Question

(Appendix 4A) Owens Corporation uses a process costing system. For March, the beginning work in process inventory consisted of 60,000 units that were 60% complete with respect to processing. The ending work in process inventory for the month consisted of units that were 20% complete with respect to processing. A summary of unit and cost data for the month follows:
 
-Assuming that Owens Corporation uses the weighted-average method,which of the following is closest to the cost per equivalent unit for processing cost for March?
A) $4.08 
B) $3.87 
C) $3.68 
D) $3.50

Quizplus · Accepted Answer

Units in beginning work in process inventory + Units started into production or transferred in = Units in ending work in process inventory + Units completed and transferred out
60,000 + 190,000 = Units in ending work in process inventory + 200,000
Units in ending work in process inventory = 60,000 + 190,000 - 200,000 = 50,000
Weighted-average method equivalent units of production
 11ea7761_18c6_18b3_81a5_c5e0b0759a1e_TB2580_00 Weighted-average method cost per equivalent unit
 11ea7761_18c6_3fc4_81a5_e98938575d8c_TB2580_00

(Appendix 4A) Owens Corporation Uses a Process Costing System