The following information is available for Department A for the month of January:
$\begin{array}{lcc}
& \underline{\text {Units}}&
\underline{\text{cost}} \
\text { Work in process, January } 1 \text { (70\% complete) } & 10,000 & \
\text { Direct materials } & & \$ 36,000 \
\text { Direct labour } & & 18,000 \
\text { Manufacturing overhead } & &\underline{ 24,000} \
\text { Total work in process, January } 1 & &\underline{ \$ 78,000 }\
\begin{array}{l}
\text { Started in production during January } \
\text { Costs added: }
\end{array} & 40,000 & \
\text { Direct materials } & & \$ 108,000 \
\text { Direct labour } & & 48,000 \
\text { Manufacturing overhead } & &\underline{ 60,600} \
\text { Total costs added during January } & & \underline{\$ 216,600 }\
\text { Work in process, January } 31 \text { ( } 80 \% \text { complete) }&4,000
\end{array}$ Materials are added at the beginning of the process.Round unit costs to two decimal places.
-Refer to the figure.What is the cost per equivalent unit of production for materials using the weighted average method?
A)$2.70
B)$2.88
C)$3.12
D)$3.60

Question

The following information is available for Department A for the month of January:
$\begin{array}{lcc}
& \underline{\text {Units}}&
\underline{\text{cost}} \
\text { Work in process, January } 1 \text { (70\% complete) } & 10,000 & \
 \text { Direct materials } & & \$ 36,000 \
 \text { Direct labour } & & 18,000 \
\text { Manufacturing overhead } & &\underline{ 24,000} \
 \text { Total work in process, January } 1 & &\underline{ \$ 78,000 }\
 \begin{array}{l}
\text { Started in production during January } \
\text { Costs added: }
\end{array} & 40,000 & \
 \text { Direct materials } & & \$ 108,000 \
 \text { Direct labour } & & 48,000 \
 \text { Manufacturing overhead } & &\underline{ 60,600} \
\text { Total costs added during January } & & \underline{\$ 216,600 }\
\text { Work in process, January } 31 \text { ( } 80 \% \text { complete) }&4,000
\end{array}$ Materials are added at the beginning of the process.Round unit costs to two decimal places.
-Refer to the figure.What is the cost per equivalent unit of production for materials using the weighted average method?
A)$2.70
B)$2.88
C)$3.12
D)$3.60

Quizplus · Accepted Answer

Using the weighted average method, we calculate the cost per equivalent unit for materials as:

Cost of beginning inventory + Cost of materials added during the period
______________________________________________________________
Equivalent units of materials

($12,000 + $36,000) ÷ (2,000 + 12,000) = $48,000 ÷ 14,000 = $3.43

Therefore, the cost per equivalent unit of production for materials using the weighted average method is $3.43.

However, we need to round the unit cost to two decimal places, which gives us:

Answer: B
 The cost per equivalent unit of production for materials using the weighted average method is $2.88.

The Following Information Is Available for Department a for the Month