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Outose Concept manufactures small tables in its Processing Department
Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before? inspection, some units are spoiled due to undetectable materials defects. Spoiled units generally constitute? 3% of the good units. Data for December 2017 are as? follows:
?WIP, beginning inventory? 12/1/2017
?22,700 units
Direct materials? (100% complete)
Conversion costs? (80% complete)
Started during December
?76,300 units
Completed and transferred out? 12/31/2017
?72,100 units
?WIP, ending inventory? 12/31/2017
?18,100 units
Direct materials? (100% complete)
Conversion costs? (60% complete)
Costs for? December:
? WIP, beginning? Inventory:
Direct materials
?$151,000
Conversion costs
?76,900
Direct materials added
?231,400
Conversion costs added
?294,000
What is the total cost per equivalent unit using the weighted-average method of process? costing? (Round any cost per unit calculations to the nearest? cent.)
A.
?$3.69
B.
?$4.04
C.
?$7.90
D.
?$3.86
Expert Solution
So, the correct option is C "$7.90".
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