Respuesta :
Answer:
$5.275 & $5.40
Explanation:
According to the scenario, computation of the given data are as follows:
Weighted Average Method :
Units Physical Direct Conversion
Completed & transferred 70,000 70,000 70,000
Ending WIP 30,000 30,000 24,000
( 30,000 × 80%)
Equivalent production Unit 100,000 100,000 94,000
So, Cost per equivalent unit under weighted average method can be calculated as:
Direct material Conversion Total cost
$1.825 $3.45 $5.275
(60,000 + 122,500) (25000+299300)
= (182,500 ÷ 100.000) =(324300 ÷ 94,000)
FIFO Method
Units Physical Direct Conversion
Beginning WIP 30,000 0 18,000
(30,000 × 0%) (30,000 × 60%)
Started & completed 40,000 40,000 40,000
Ending WIP 30,000 30,000 24,000
(30,000 × 80%)
Equivalent production Unit 100,000 70,000 82,000
So, Cost per equivalent unit under FIFO method can be calculated as:
Direct material Conversion Total cost
$1.75 $3.65 $5.40
(122,500 ÷ 70,000) (299,300 ÷ 82,000)
The computation of the costs per equivalent unit under the weighted-average and FIFO methods are as follows:
Weighted-Average FIFO
Direct Conversion Direct Conversion
Materials Costs Materials Costs
Cost per equivalent unit $1.825 $3.45 $2.607 $3.955
Data and Calculations:
Work in process inventory, June 1: 30,000 units
Direct materials: 100% complete $60,000
Conversion: 40% complete $25,000
Balance in work process = $85,000
Units started during June 70,000
Units completed and transferred out 70,000
Work in process inventory, June 30 30,000
Direct materials: 100% complete
Conversion: 80% complete
Costs incurred during June
Direct materials = $122,500
Conversion costs:
Direct labor = $119,720
Applied overhead = $179,580
Total conversation costs = $299,300
Total Costs of Production:
Direct Conversion Total
Materials Costs Costs
Beginning inventory $60,000 $25,000 $85,000
Costs added during period 122,500 299,300 421,800
Total costs of production $182,500 $324,300 $506,800
Equivalent units of production (weighted-average)
Physical Direct Conversion
Units Materials Costs
Beginning inventory 30,000 0 0
Units transferred out 70,000 70,000 (100%) 70,000 (100%)
Ending inventory 30,000 30,000 (100%) 24,000 (80%)
Total equivalent units 100,000 94,000
Cost per equivalent unit $1.825 $3.45
($182,500/100,000) ($324,300/94,000)
Equivalent units of production (FIFO)
Physical Direct Conversion
Units Materials Costs
Beginning inventory 30,000 0 18,000 (60%)
Units started & completed 40,000 40,000 (100%) 40,000 (100%)
Ending inventory 30,000 30,000 (100%) 24,000 (80%)
Total equivalent units 70,000 82,000
Cost per equivalent unit $2.607 $3.955
($182,500/70,000) ($324,300/82,000)
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