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Calculating Equivalent Units and Cost per Equivalent Unit

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Exercise 4-8 - Equivalent Units and Cost per Equivalent Unit - Weighted-Average Method (L02, L04)

Solex Company produces a high-quality insulation material that passes through two production processes. A quantity schedule for June for the first process follows:

Quantity Schedule

Units to be accounted for:
Work in process, June 1 (materials 75%
Complete: conversion 40% complete) ........ 60,000
Started into production ............................ 280,000
Total units to be accounted for ...................... 340,000

Equivalent Units
___________________________
Materials Conversion
Units accounted for as follows:
Transferred to the next process ..................... 300,000 ? ?
Work in process, June 30 (materials 50%
Complete: conversion 25% complete) 40,000 ? ?
Total units accounted for ............................... 340,000 ? ?

Cost in the beginning work in process inventory of the first processing department were: materials, $56,600; and conversion cost, $14,900. Cost added during June were: materials, $385,000; and conversion cost, $214,500.

Required:

1. Assume that the company uses the weighted-average method of accounting for units and cost. Determine the equivalent unit for June for the first process.
2. Compute the cost per equivalent unit for June for the first process.

Page 2

Exercise 5-1 Fixed and Variable Cost Behavior (LOI)
Koffee Express operates a number of expresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,100 and the variable cost per cup of coffee served is $0.26

Required:
1. Fill in the following table with your estimates of total cost and cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.

Cups of Coffee Served in a Week
1,800 1,900 2,000

Fixed cost ............................................... ? ? ?

Variable cost ............................................ ? ? ?

Total cost ................................................ ? ? ?

Cost per cup of coffee served ........................ ? ? ?

2. Does the cost per cup of coffee served increase, decrease, or remain the same as the number
Of cups of coffee served in a week increases? Explain.

See attached file for full problem description.

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Exercise 4-8 - Equivalent Units and Cost per Equivalent Unit - Weighted-Average Method (L02, L04)

Solex Company produces a high-quality insulation material that passes through two production processes. A quantity schedule for June for the first process follows:

Quantity Schedule

Units to be accounted for:
Work in process, June 1 (materials 75%
Complete: conversion 40% complete) ........ 60,000
Started into production ............................ 280,000
Total units to be accounted for ...................... 340,000

Equivalent Units
___________________________
Materials Conversion
Units accounted for as follows:
Transferred to the next process ..................... 300,000 ? ?
Work in process, June 30 (materials 50%
Complete: conversion 25% complete) 40,000 ? ?
Total units accounted for ............................... 340,000 ? ?

Cost in the beginning work in process inventory of the first processing department were: materials, $56,600; and conversion cost, $14,900. Cost added during June were: ...

Solution Summary

This solution is comprised of a detailed explanation to find the Equivalent Units and Cost per Equivalent Unit under Weighted-Average Method.

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Cost per equivalent unit; costs assigned to products

The part 3 answer is not matching the the check answer. Please help.

Cost per equivalent unit; costs assigned to products.

Fairfax Company uses weighted-average process costing to account for its production costs. Direct labor is added evenly throughout the process. Direct materials are added at the beginning of the process. During September, the company transferred 735,000 units of product to finished goods. At the end of September, the goods in process inventory consist of 207,000 units that are 90% complete with respect to labor. Beginning inventory had $244,920 of direct materials and $69,098 of direct labor cost. The direct labor cost added in September is $1,312,852, and the direct materials cost added is $1,639,080.

Required:
1.Determine the equivalent units of production with respect to (a) direct labor and (b) direct materials.
2.Compute both the direct labor cost and the direct materials cost per equivalent unit.
3.Compute both direct labor cost and direct materials cost assigned to (a) units completed and transferred out, and (b) ending goods in process inventory.

Check answer: (2) Direct labor cost per equivalent unit, $1.50 (3b) $693,450.

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