[CPALady18]

A company that produces a single product using a continuous process had no work in process on April 1. During the month of April, 10,000 units were started and 9,000 completed units were transferred. The ending work-in-process inventory was complete as to materials and 50% complete as to conversion. The cost of direct materials was $114,000, and the cost of direct labor amounted to $38,000. Manufacturing overhead is assigned at the rate of 50% of direct materials. For the purpose of determining the cost of goods manufactured in April, what is the cost per equivalent whole unit?

A. $23.22
B. $21.40
C. $20.90
D. $15.40

Answer is B.

It sucks that some of the AICPA released QAs doesn’t have explanations 🙁 lol

[jjjgolf500]

Unit Complete = 9000
Unit in end inv = 500 (1000*.50%)
Units = 9500

DM = 114,000
DL = 38,000
MOH = 51,300 (9000 of the 10000 units were complete so 90% of the DM cost are used) 90%*114,000 = 102,600*50% = 51,300
Total Cost = 203,300

Equiv Units = 21.4 (203,300/9500)

I could be totally wrong on the MOH calculation, but the math works so I think its correct.

[CPALady18]

Thank you so much!

[Author]

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