South Atlantic Pulp Company processes wood pulp for manufacturing various paper products. The company employs a process
Question:
South Atlantic Pulp Company processes wood pulp for manufacturing various paper products. The company employs a process costing system for its manufacturing operations. All direct materials are added at the beginning of the process, and conversion costs are incurred uniformly throughout the process. This is the company’s production schedule for May:
PERCENT COMPLETE | ||||
Tons of Pulp | Materials | Conversion | ||
Work-in-process inventory, May 1 | 6,000 | 100% | 50% | |
Started during May | 15,000 | |||
Units to account for | 21,000 | |||
Units from beginning work-in-process | ||||
which were completed and | ||||
transferred out during May | 6,000 | |||
Started and completed during May | 12,000 | |||
Work-in-process inventory, May 31 | 3,000 | 100% | 50% | |
Total units account for | 21,000 | |||
The following cost data are available:
Work-in-process inventory, May 1
Direct materials ...........$ 88,000
Conversion ............ 126,000
Costs incurred during May
Direct materials ........... 220,000
Conversion ............ 356,000
Required
1. Calculate equivalent units of direct materials and conversion during May. Use the weighted-average method.
2. Calculate the cost per equivalent unit for both direct materials and conversion during May. Use the weighted-averagemethod.
Step by Step Answer:
Cost management a strategic approach
ISBN: 978-0073526942
5th edition
Authors: Edward J. Blocher, David E. Stout, Gary Cokins