Question

Superior Micro Products uses the weighted-average method in its process costing system. Data for the Assembly Department for May appear below: Materials Labor Overhead Work in process, May 1 $ 18,000 $ 5,500 $ 27,500 Cost added during May $ 238,900 $ 80,300 $ 401,500 Equivalent units of production 35,000 33,000 33,000 Required: Compute the cost per equivalent unit for materials, labor, overhead, and in total. (Round your answers to 2 decimal places.)

Answer 1

Answer:

EUC

Materials 7.34

Labor 2.60

Overhead 13

Explanation:

We will add for each category the beginning cost wth the cost added during the period:

Materials:

18,000 + 238,900 = 256,900

Labor:

5,500 +   80,300 =    85,800

Overhead:

27,500 + 401,500 =  429,000

Now we diivde by the equivalent units of each category:

Equivalent  unit cost:

Materials:

256,900 /35,000 = 7.34

Labor:

85,800 / 33,000 =  2.60

Overhead:

429,000 / 33,000 = 13

Answer 2

Equivalent unit cost is referred to as such cost, which is the outcome of the total units available divided from the total cost derived for such productions.

The correct statement is that the equivalent cost per unit of Superior Micro Products for materials is $7.34; for labor is $2.60 and for overheads is $13 using the weighted average method.

How to calculate equivalent cost per unit?

The computation for equivalent cost per unit will be calculated on adding both the costs of work in progress and that of further cost added during the month of May.

So, the costs of materials will be $256,900; cost of labors will be $85,800 and the overhead costs will be $429,000. It is given that units of production were 35,000, 33,000 and 33,000 for materials, labor and overheads respectively.

Now, the formula for computation of equivalent costs is as given below,

$\rm Equivalent\ Cost\ per\ Unit= \dfrac{Total\ Cost\ }{No.\ of\ Units}$

Now using the information given the costs for each of the factors will be calculated as,

For materials,

$\rm Equivalent\ Cost\ per\ Unit\ for\ Materials = \dfrac{256,900}{35000}\\\\\rm Equivalent\ Cost\ per\ Unit\ for\ Materials =\ 7.34$

For Labor,

$\rm \rm Equivalent\ Cost\ per\ Unit\ for\ Labors =\dfrac{85800}{33000}\\\\ \rm Equivalent\ Cost\ per\ Unit\ for\ Labors= \ 2.60$

For Overheads,

$\rm Equivalent\ Cost\ per\ Unit\ for\ Overheads= \dfrac{429000}{33000}\\\\ \rm Equivalent\ Cost\ per\ Unit\ for\ Overheads= \ 13$

Hence, the equivalent cost per unit for materials, labors and overheads for the month of May for Superior Micro Products are calculated as $7.34, $2.60 and $13 respectively.

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