Answer:
Statement of Equivalent Units
Material Conversion
Units Units
Finished goods 17,000 17,000
Add: Ending work-in-progress 4,000 2,800
Average divisor 21,000 19,800
Computation of cost per unit using weighted average method
Material = $57,540
21,000 units
= $2.74 per unit
Conversion = $36,036
19,800 units
= $1.82 per unit
Value of inventory transferred out: $
Material 17,000 units x $2.74 = 46,580
Conversion 17,000 units x $1.82 = 30,940
Total 77,520
Explanation:
In this case, we need to prepare statement of equivalent units in order to determine the average divisor. The average divisor is the aggregate of units transferred out and closing work-in-progress. Closing work-in-progress is the difference between units to account for and units transferred out.
Thereafter, we will divide the total cost of material and conversion by the average divisors in order to obtain the unit cost of material and conversion.
Then, we will multiply the unit cost of material and conversion by the units transferred out.
