eBook Calculator Cost per Equivalent Unit Average Cost Metho

eBook Calculator Cost per Equivalent Unit: Average Cost Method The following information concerns production in the Forging Department for April. The Forging Department uses the average cost method. ACCOUNT Work in Process-Forging Department ACCOUNT NO. Balance Date Item DebitCredit DebitCredit April 1 Bal., 1,800 units, 40% completed 30 Direct materials, 41,600 units 30 Direct labor 30 Factory overhead 30 Goods transferred, 41,300 units 30 Bal., 2,100 units, 60% completed 6,940 260,700 367,200 425,600 253,760 106,500 58,400 a. Determine the cost per equivalent unit. Round your answer to the nearest cent. per equivalent unit b. Determine the cost of the units transferred to Finished Goods. c. Determine the cost of units in ending Work in Process.

Solution

The equivalent units of production & cost per unit Particulars Units % completion Equivalent Units Begining Work in Process inventory 1,800 40%               720 Processed During the month: Units Started 41,600 Begining Work in Process inventory 1,800 60%            1,080 Units Started & Completed in current month 39,500 100%         39,500 Units Started & not Complete in current month 2,100 60%            1,260 Total Equivalent Units         42,560 Total Cost      4,25,600 Requirement a. Costs per equivalent unit of production (425,600/42,560)            10.00 Requirement b. Cost of units transferred to finished goods (41,300*10.00) 413,000 Requirement c. Cost of units in ending work in process (1,260*10.00) 12,600