Business, 28.02.2021 16:50 reeeg38

O'Leary Company manufactures Product Z in a two-stage production cycle in Departments A and B. Materials are added at the beginning of the process in Department B. O'Leary uses the weighted-average method. Conversion costs for Department B were 40% complete as to the 40,000 units in the beginning work-in-process (WIP) inventory and 50% complete as to the 56,000 units in the ending work-in-process inventory. 80,000 units were completed and transferred out of Department B during October. An analysis of the costs relating to work-in-process inventories and production activity in Department B for October follows: Transferred-
in CostsMaterials
CostsConversion
Costs
WIP, October 1:$80,000 $24,000 $8,000
Costs added in October 192,000 44,000 35,200
The total cost per equivalent unit transferred-out for October of Product Z, rounded to the nearest penny, was:

A. $2.80.
B. $2.75.
C. $2.90.
D. $2.85.
E. $2.95.

Answers: 3

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Answers

Answer from: madison6592

C. $2.90

Explanation:

Weighted average cost is given by :

Beginning units 40,000 Transferred out 80,000

Started in production 96,000 Ending units 56,000

136,000 136,000

Equivalent units is given by :

Transferred in Material Conversion cost

Units transferred A 80,000 80,000 80,000

Ending Units 56,000 56,000 56,000

Completion 100% 100% 50%

B 56,000 56,000 28,000

Total units 136,000 136,000 108,000

Cost per equivalent units

Particulars Transferred in Material Conversion cost

At beginning 80,000 24,000 8000

Added during the month 192,000 44,000 35,200

Cost to be accounted for A 272,000 68,000 43,200

Total equivalent units (B) 136,000 136,000 108,000

Cost per equivalent unit (a/b) 2.00 0.5 0.4

Therefore, total cost per equivalent unit is = 2.00 + 0.5 + 0.4

= 2.90

Answer from: Quest

Is this supposed to be a question or a protest

Answer from: Quest

answermeasured by how well she or he does the job'; /

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