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# Process costing

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Cassatt Ltd. uses process costing to account for the costs of manufacturing their office bookcases. The following information is available for the month of November 2009:

Beginning WIP inventory (physical units) 8,000 75% complete for conversion
Units started during the month 102,000
Ending WIP inventory (physical units) 10,000 65% complete for conversion

Costs attached to beginning WIP inventory:
Direct material \$12,000
Conversion costs \$2,500

Direct material \$49,500
Conversion costs \$9,500

Conversion costs are added evenly during the process, while direct materials are added in two stages during the production process. Oneâ?half of all direct materials are added at the beginning of the process, with the remaining half added when the process is 60% complete.

Assume that Cassatt uses the FIFO method of process costing.

1. What is the equivalent unit cost for the month of November for direct materials (round to four
decimal places)?
a. \$0.4670
b. \$0.4853
c. \$0.5025
d. \$0.5802
e. \$0.6029

2. Assume now that Cassatt uses the weightedâ?average method of process costing, and that the total equivalent units for the month were calculated to be 110,000 for direct materials and 106,500 for conversion. What is the total dollar value of the cost of goods transferred from work in progress to finished goods? Round the equivalent unit costs to four decimal places.

a. \$53,920
b. \$61,803
c. \$67,177
d. \$68,033
e. \$68,420