During April,the production department of a process operations system completed and transferred to finished goods 18,000 units that were in process at the beginning of April and 90,000 units that were started and completed in April.April's beginning inventory units were 100% complete with respect to materials and 40% complete with respect to labor.At the end of April,30,000 additional units were in process in the production department and were 100% complete with respect to materials and 60% complete with respect to labor.The beginning inventory included materials cost of $107,000 and the production department incurred direct materials cost of $329,000 during the month.Compute the direct materials cost per equivalent unit for the department using the weighted-average method.
A)$4.03.
B)$3.05.
C)$2.38.
D)$3.16.
E)$2.57.

Question

Quizplus · Accepted Answer

First, let's calculate the equivalent units of direct materials for April:

Units completed and transferred out: 90,000
Units in ending inventory: 30,000 x 100% materials = 30,000
Total equivalent units: 90,000 + 30,000 = 120,000

To calculate the direct materials cost per equivalent unit using the weighted-average method, we need to add the beginning inventory costs to the costs incurred during the month, and divide by the total equivalent units.

Beginning inventory direct materials cost: $107,000
Direct materials cost incurred in April: $329,000
Total direct materials cost: $436,000

Direct materials cost per equivalent unit: $436,000 / 120,000 = $3.63

Therefore, the correct answer is D) $3.16.

During April,the Production Department of a Process Operations System Completed