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The following information pertains to a manufacturing company that uses the process cost system: Total Cost Total DM Total CC Cost of Beginning WIP $ 48,000 $ 16,000 $ 32,000 Current Costs $ 346,000 $ 126,000 $ 220,000 Total Costs $ 394,000 $ 142,000 $ 252,000 # of Equivalent Units 20,400 20,000 Cost per unit 6
The following information pertains to a manufacturing company that uses the process cost system:
|
Total Cost |
Total DM |
Total CC |
|
|
Cost of Beginning WIP |
$ 48,000 |
$ 16,000 |
$ 32,000 |
|
Current Costs |
$ 346,000 |
$ 126,000 |
$ 220,000 |
|
Total Costs |
$ 394,000 |
$ 142,000 |
$ 252,000 |
|
# of Equivalent Units |
20,400 |
20,000 |
|
|
Cost per unit |
6.96078 |
12.60 |
Based on the above, which method was applied in calculating the cost per unit?
a. Calculating the unit cost does not depend on the method ysed
b. LIFO
c. FIFO
d. Weighted Average Method
Expert Solution
Answer is d. Weighted Average Method
Since Average of beginning costs and costs added is taken.
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