Answered

A company uses a process costing system. Its Assembly Department's beginning inventory consisted of 51,600 units, 75% complete with respect to direct labor and overhead. The department completed and transferred out 123,500 units this period. The ending inventory consists of 41,600 units that are 25% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $28,000 and overhead costs of $36,000 for the period. Assuming the weighted average method, the direct labor cost per equivalent unit (rounded to the nearest cent) is:

Answer :

Answer:

$0.28

Explanation:

The computation of direct labor cost per equivalent unit is shown below:-

Equivalent production for a period = Units that are completed during the period + Equivalent units in process at the end of period

= $123,500 + (41,600 × 25%)

= $123,500 + 10,400

= $133,900

Total costs = Beginning cost + Current cost

= $9,300 + $28,000

= $37,300

Cost per equivalent unit = Total costs ÷ Total equivalent units completed

= $37,300 ÷ $133,900

= $0.28

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