Vicious Company produces plastic cups in a one- department process. The following information is available: $\begin{array} { l }
\text {Work-in- process inventory, beginning }& 0\
\text { Unitsstarted}& 60,000\
\text {Units complete and transferred out }&48,000 \
\text {Work-in- process inventory,ending }&12,000 \
\text {Direct materials added }& \$240,000\
\text {Direct labor }&\$165,600 \
\text {Factory overhead }&\$82,800 \
\end{array}$
The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The cost of one completed unit is:

Question

Vicious Company produces plastic cups in a one- department process. The following information is available: $\begin{array} { l  }
 \text {Work-in- process inventory, beginning }& 0\
 \text { Unitsstarted}& 60,000\
 \text {Units complete and transferred out }&48,000 \
 \text {Work-in- process inventory,ending }&12,000 \
 \text {Direct materials added }& \$240,000\
 \text {Direct labor }&\$165,600 \
 \text {Factory overhead }&\$82,800 \
\end{array}$
 The units still in process are 100% complete with respect to direct materials and 60% complete with respect to conversion costs. The cost of one completed unit is:

Quizplus · Accepted Answer

The total cost is the sum of direct materials, direct labor, and factory overhead: $240,000 + $165,600 + $82,800 = $488,400. The equivalent units for conversion costs are 48,000 completed units + (12,000 units * 60%) = 55,200. The cost per equivalent unit is $488,400 / 60,000 = $8.14 for materials and $488,400 / 55,200 = $8.84 for conversion. The cost of one completed unit is $8.50.

Vicious Company Produces Plastic Cups in a One- Department Process