Zap Rap Inc is a manufacturer of audio CDs The companys chie

Zap Rap Inc. is a manufacturer of audio CDs. The company\'s chief financial officer is trying to verify the accuracy of the December 31 work in process and finished goods inventories prior to closing the books for the year. He strongly suspects that the year-end dollar balances are incorrect, but he believes that all the other data are accurate. The year-end balances shown on Zap Rap\'s books are as follows Units Costs Work in process, December 31 (materials 100% complete conversion 50% complete) Finished goods, December 31 38,000 73,500 $118,190 $257,630 There were no finished goods inventories at the beginning of the year. The company uses the weighted- average method of process costing. There is only one processing department. A review of the company\'s inventory and cost records has disclosed the following data Costs Materials $ 52,632 $1,370,880 Conversion $49,880 $1,818,490 Units Work in process, January 1 (materials 100% 34,400 896,000 complete. conversion 80% complete) Started into production Costs added during the year Units completed during the year 892,400 Required. 1. Determine the equivalent units and the costs per equivalent unit for materials and conversion for the year. (Round your \"Cost per equivalent unit\" answers to 2 decimal places.]) Materials Conversion Equivalent units of production Cost per equivalent unit

Solution

1)

2)

3)

4)

**unit sold =Beginning +unit transfered -ending Finished goods

                    = 0+892400-73500

                     = 818900

	Material	conversion
unit completed and transfered out	892400	892400
Ending WIP	38000	19000     [38000*50%]
Equivalent units	930400	911400
Cost incurred Till date	52632+1370880=1423512	49880+1818490=1868370
cost per equivalent unit	1423512/930400=$1.53	1868370/911400=$ 2.05