The Cooking Department is the third department at Winslow Rice Production. During February, there were 8,000 units of beginning inventory in the Cooking Department, and 50,000 units were transferred in from the prior process. There were 4,000 units in ending inventory. The transferred-in cost in the beginning inventory was $80,000, with $900,000 of additional cost for units transferred in during the month. What is the cost per equivalent unit for transferred-in cost?

Question

Quizplus · Accepted Answer

The total transferred-in cost is $80,000 + $900,000 = $980,000. 
The total equivalent units for transferred-in cost is 50,000 units (transferred in) + 4,000 units (ending inventory) = 54,000 equivalent units.
Therefore, the cost per equivalent unit for transferred-in cost is $980,000 ÷ 54,000 equivalent units = $18.15 per unit. However, since the question is asking for the cost per equivalent unit, the answer is $16.90 per equivalent unit (not per unit) because the beginning inventory units already incurred costs and are not considered equivalent units. Thus, the best choice is B.

The Cooking Department Is the Third Department at Winslow Rice