Simon Productions Company had a beginning work in process inventory totaling $6,000.During the current period,the company added materials costs of $12,300,labor cost of $14,500 and overhead of $18,200.Equivalent production was 12,000 units,and 9,000 units were completed and transferred to the finished goods inventory.Inventory costs would be determined using a unit cost of

Question

Quizplus · Accepted Answer

To calculate the unit cost, we need to divide the total cost (materials, labor, and overhead) by the equivalent units of production.

Total cost = $12,300 + $14,500 + $18,200 = $45,000

Equivalent units of production = completed units + (ending WIP * percentage of completion)

Ending WIP inventory = 12,000 - 9,000 = 3,000 units 
Percentage of completion = (6,000/12,000) * 100 = 50%

Equivalent units of production = 9,000 + (3,000 * 50%) = 10,500 units

Unit cost = $45,000 / 10,500 = $4.25

Therefore, the answer is C.

Simon Productions Company Had a Beginning Work in Process Inventory