Link Company uses a process cost system and the weighted average method.During the year Link Companythe company completed 1,300 units of product.Ending inventory consisted of 400 units that were 50% complete.The total dollar cost associated with production of inventory was $90,000.The cost per equivalent whole unit would be which of the following?
A) $54.00
B) $69.22
C) $60.00
D) $83.82

Question

Quizplus · Accepted Answer

Weighted average method:
Total equivalent units = Units finished and transferred out + (Ending inventory x Percentage complete
Total equivalent units = 1,300 units + (400 units x 0.50)= 1,500
Cost per equivalent unit = Total product costs in department ÷ Equivalent whole units
Cost per equivalent unit = $90,000 ÷ 1,500 Equivalent whole units = $60.00

Link Company Uses a Process Cost System and the Weighted