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Homework answers / question archive / Ambeth Manufacturing uses a process cost system to manufacture Dust Density Sensors for the mining industry
Ambeth Manufacturing uses a process cost system to manufacture
Dust Density Sensors for the mining industry. The following information
pertains to operations for the month of May 1998.
Units
Beginning work-in-process inventory, May 1
16,000
Started in production during May
100,000
Completed production during May
92,000
Ending work-in-process inventory, May 31
24,000
The beginning inventory was 60% complete for materials and
20% complete for conversion costs.
Costs pertaining to the month of May are as follows:
?
Beginning inventory costs are materials, P54,560; direct
labor, P20,320; and factory overhead, P15,240.
?
Costs incurred during May are materials used, P468,000;
direct labor, P182,880; and factory overhead, P391,160
Using the weighted-average method, the equivalent unit cost of
materials for May is
a.
P4.12
b.
P4.50
c.
P4.60
d.
P5.68
Answer
c .
Explanation
| Computation of Equivalent Units of Production: | |||||
| Physical Units | Materials | Conversion | |||
| % | Units | % | Units | ||
| Completed Production | 92,000 | 100% | 92000 | 100% | 92000 |
| Ending Work-in-Process | 24,000 | 90% | 21600 | 40% | 9600 |
| Total | 113600 | 101600 | |||
| Equivalent Unit Cost of Material: | |||||
| Beginning Inventory Cost for Materials | 54560 | ||||
| Cost incurred during May for Material Use | 468,000 | ||||
| Total Cost of Material (a) | 522,560 | ||||
| Equivalent Units Production for Material (b) | 113600 | ||||
| Equivalent Unit Cost of Material (a/b) | 4.6 | ||||
