During the month,1,600 units of a product were completed and 900 units were two-thirds complete with respect material and one-third complete with respect to labor and overhead.After completing equivalent unit cost computations,the company determined material cost was $3.25 and the combined labor and overhead cost was $6.50 per unit.Compute the cost of completed units.

Question

Quizplus · Accepted Answer

First, we need to calculate the equivalent units of production (EUP) for both materials and labor/overhead costs:

Materials EUP:

Completed units: 1,600
Two-thirds of 900 units: 600

Total EUP for materials: 2,200

Labor/Overhead EUP:

Two-thirds of 900 units (with respect to labor/overhead): 600 x 2/3 = 400

Total EUP for labor/overhead: 400

Next, we calculate the total cost for each category:

Total materials cost = 2,200 EUP x $3.25 per unit = $7,150
Total labor/overhead cost = 400 EUP x $6.50 per unit = $2,600

Finally, we add the two costs to get the total cost of completed units:

Total cost of completed units = $7,150 + $2,600 = $9,750

Therefore, the closest answer is A) $15,600.

During the Month,1,600 Units of a Product Were Completed and 900