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Livingston Co
Livingston Co. uses process costing to account for the production of elastic bands. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $22,000 in materials and $24,000 in conversion costs. April costs were $80,000 for materials and $84,000 for conversion costs. During April 9,600 units were completed. Ending work in process inventory was 4,800 units (100% complete for materials, 50% for conversion). The equivalent cost per unit for materials using the weighted average method would be closest to:
Multiple Choice
O $14.420 O $7.083 O $1.750 O $5.930
TryFit Co. uses process costing to account for the production of energy food bars. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $18,000 in materials and $15,000 in conversion costs. April costs were $47,000 for materials and $51,000 for conversion costs. During April 19,000 units were completed. Ending work in process inventory was 15,000 units (100% complete for materials, 50% for conversion). The value of units completed and transferred out using the weighted average method would be closest to: (Round your intermediate calculations to four decimal places.)
Multiple Choice
O $99.612.20
O $95,779.20 O $84,779.20 O $83,645.60
Expert Solution
1) Computation of Equivalent Cost per Unit for Material using Weighted Average Method:
Equivalent units for material = Units Completed + Units in Ending Inventory
= 9,600 + 4,800
= 14,400
Equivalent Cost per Unit for Material = Total material cost / Equivalent units for material
= ($22,000 + $80,000) / 14,400
= $7.083 per unit
So, the correct option is 2nd "$7.083".
2)
| Computation of Equivalent Cost per Unit: | |||
| Physical Units | Materials | Conversion Cost | |
| Units accounted for: | |||
| Completed and Transferred out | 19,000 | 19,000 | 19,000 |
| Ending Work-in-Process | 15,000 | 15000 | 7500 |
| Total Units accounted for | 34,000 | 34,000 | 26,500 |
| Costs | Material | Conversion Costs | Total |
| Transferred in Costs | $18,000 | $15,000 | $33,000 |
| Costs added during the period | $47,000 | $51,000 | $98,000 |
| Total Cost accounted for | $65,000 | $66,000 | $131,000 |
| Total Units accounted for | 34,000 | 26,500 | |
| Cost per Equivalent Unit | $1.91 | $2.49 | $4.40 |
Value of Units Completed and Transferred Out = Total Cost per Equivalent Unit*Total Units Completed and Transferred Out
= $4.40*19,000 units
= $83,644.28
So, the correct option is 4th "$83,645.60"
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