Reed Productions has provided the following information for the year: $$\begin{array} { | l | r | }
\hline \text { Direct Labor } & \$ 150,000 \
\hline \text { Beginning Work-in-Process Inventory } & 63,000 \
\hline \text { Direct Materials Used } & 269,000 \
\hline \text { Ending Work-in-Process Inventory } & 52,900 \
\hline \text { Manufacturing Overhead } & 135,000 \
\hline
\end{array}$$ During the year,Reed produced 71,220 units of product.Calculate the unit product cost.(Round your answer to the nearest cent. )
A)$7.92
B)$6.77
C)$7.78
D)$8.66

Question

Reed Productions has provided the following information for the year: $$\begin{array} { | l | r | } 
\hline \text { Direct Labor } & \$ 150,000 \
\hline \text { Beginning Work-in-Process Inventory } & 63,000 \
\hline \text { Direct Materials Used } & 269,000 \
\hline \text { Ending Work-in-Process Inventory } & 52,900 \
\hline \text { Manufacturing Overhead } & 135,000 \
\hline
\end{array}$$ During the year,Reed produced 71,220 units of product.Calculate the unit product cost.(Round your answer to the nearest cent. )
A)$7.92
B)$6.77
C)$7.78
D)$8.66

Quizplus · Accepted Answer

The correct answer is A.The unit product cost is calculated by dividing the total manufacturing costs by the number of units produced. The total manufacturing costs are the sum of direct labor, direct materials used, manufacturing overhead, and the change in work-in-process inventory. The change in work-in-process inventory is calculated by subtracting the beginning work-in-process inventory from the ending work-in-process inventory.In this case, the total manufacturing costs are $150,000 + $269,000 + $135,000 + ($52,900 - $63,000) = $593,900. The number of units produced is 71,220. Therefore, the unit product cost is $593,900 / 71,220 = $7.92 (rounded to the nearest cent).

Reed Productions Has Provided the Following Information for the Year