Livingston Co. uses process costing to account for the production of elastic bands. Direct materials are added at the beginning of the process and conversion costs are incurred uniformly throughout the process. Beginning inventory consisted of $14,000 in materials and $8,000 in conversion costs. April costs were $72,000 for materials and $80,000 for conversion costs. During April 8,000 units were completed. Ending in process inventory was 4,000 units (100% complete for materials, 50% for conversion). The total cost per unit using the weighted average method would be:

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Quizplus · Accepted Answer

The total cost per unit is calculated by adding the total costs of materials and conversion, then dividing by the total equivalent units. Total costs = $14,000 (beginning materials) + $8,000 (beginning conversion) + $72,000 (April materials) + $80,000 (April conversion) = $174,000. Equivalent units for materials = 8,000 (completed) + 4,000 (ending inventory) = 12,000. Equivalent units for conversion = 8,000 (completed) + 2,000 (50% of ending inventory) = 10,000. Cost per equivalent unit for materials = $86,000 / 12,000 = $7.1667. Cost per equivalent unit for conversion = $88,000 / 10,000 = $8.8000. Total cost per unit = $7.1667 + $8.8000 = $15.9667.