Question

During March, the production department of a process manufacturing system completed a number of units of a product and transferred them to finished goods. Of the units transferred, 25,000 were in process at the beginning of March and 110,000 were started and completed in March. March's beginning inventory units were 100% complete with respect to materials and 55% complete with respect to labor. At the end of March, 30,000 additional units were in process in the production department and were 100% complete with respect to materials and 30% complete with respect to labor. The production department incurred direct labor cost of $578,900 and its beginning inventory included labor cost of $54,700. Compute the direct labor cost per equivalent unit for the department using the weighted-average method. $4.69. $3.84. $4.86. $4.28. $4.40.

Answer 1

Step-by-step explanation:

Units completed and transferred out 135000 [25000+110000]

Ending work in process 9000 [30000*30%]

Equivalent units of production 144000 [135000+9000]

Beginning inventory labor costs 54700

Add: Labor costs incurred 578900

Total labor costs 633600

Divide by Equivalent units of production 144000

Direct labor cost per Equivalent unit 4.40