Solution-Calculate the equivalent unit cost for the product

Calculate the equivalent unit cost for the product

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Reference no: EM133188131

Question - Thirsty Ltd who manufacture orange juice use a process costing system. All direct materials are added at the beginning of the process and conversion costs are incurred evenly throughout production. The information for April's activities is given below:

Work in process 1 April - 10,000 units
Direct material (100% complete)	$22,000
Conversion cost (20% complete)	$8,000
Balance of work in process, 1 April	$26,500

Units started during April	100,000 units
Units completed during April and transferred out to finished goods inventory	80,000 units
Work in process , 30 April:
Direct materials (100% complete)
Conversion (30 % complete)
Costs incurred during April:
Direct material	$198,000
Conversion costs:	$158,400
Direct labour $52,800
Manufacturing overhead $105,600
Total production costs incurred during April	$356,400

Required - Answer the following question using the weighted average method. Show all workings.

a) Show a summary of the total physical flow of units.

b) Calculate the equivalent units for the company.

c) Calculate the equivalent unit cost for the product.

d) Explain why under process costing, direct labour cost and conversion cost are added together?

Reference no: EM133188131

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Calculate the equivalent unit cost for the product

Reference no: EM133188131

Reference no: EM133188131

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