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Pacific Ink had beginning work-in-process inventory of $387,380 on October 1. Of this amount, $158,120 was...

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Accounting

Pacific Ink had beginning work-in-process inventory of $387,380on October 1. Of this amount, $158,120 was the cost of directmaterials and $229,260 was the cost of conversion. The 22,000 unitsin the beginning inventory were 30 percent complete with respect toboth direct materials and conversion costs.

  

     During October, 51,000 units weretransferred out and 16,000 remained in ending inventory. The unitsin ending inventory were 80 percent complete with respect to directmaterials and 30 percent complete with respect to conversion costs.Costs incurred during the period amounted to $1,181,700 for directmaterials and $1,523,320 for conversion

Required:

Compute the cost per equivalent unit for direct materials andfor conversion costs using the weighted-average method.(Round your answers to 2 decimal places.)

Answer & Explanation Solved by verified expert
4.4 Ratings (950 Votes)

Solution

Material Conversion
Cost per equivalent Unit $           21.00 $             31.41

Working

Statement of Equivalent Units
Material Conversion
Units Complete % Equivalent units Complete % Equivalent units
Transferred             51,000 100%            51,000 100%                  51,000
Closing WIP             16,000 80%            12,800 30%                     4,800
Total             67,000 Total            63,800 Total                  55,800
Cost per Equivalent Units
COST Material Conversion TOTAL
Beginning WIP Inventory Cost $       1,58,120 $     2,29,260 $    3,87,380
Cost incurred during period $     11,81,700 $ 15,23,320 $ 27,05,020
Total Cost to be accounted for $     13,39,820 $ 17,52,580 $ 30,92,400
Total Equivalent Units               63,800             55,800
Cost per Equivalent Units $             21.00 $           31.41

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