Bost Products Inc. manufactures plastic products and uses process costing to account for the cost of products manufactured. All product costs are added evenly throughout the production process. The following information was available for the plastic department for the month of December:
$\begin{array}{lrr}
&\text { Number }&\text { Production }\
& \underline{\text { of units }}& \underline{\text { Costs }}\
\text { Beginning work-in-process ( } 60 \% \text { complete) } & 20000 & \$72000 \
\text { Current period production } &300000 & 1809000 \
\text { Ending work-in-process ( } 35 \% \text { complete) } & 10000 &
\end{array}$

-If Bost uses the weighted-average method of computing equivalent units and assigning product costs,what is the cost per equivalent unit for December?

Question

Bost Products Inc. manufactures plastic products and uses process costing to account for the cost of products manufactured. All product costs are added evenly throughout the production process. The following information was available for the plastic department for the month of December:
$\begin{array}{lrr}
&\text { Number }&\text { Production }\
& \underline{\text { of units }}& \underline{\text { Costs }}\
\text { Beginning work-in-process ( } 60 \% \text { complete) } & 20000 & \$72000 \
\text { Current period production } &300000 & 1809000 \
\text { Ending work-in-process ( } 35 \% \text { complete) } & 10000 &
\end{array}$

-If Bost uses the weighted-average method of computing equivalent units and assigning product costs,what is the cost per equivalent unit for December?

Quizplus · Accepted Answer

The cost per equivalent unit using the weighted-average method is calculated as follows:1. Total Costs = Beginning WIP Costs + Current Period Production Costs = $72,000 + $1,809,000 = $1,881,0002. Equivalent Units = (Beginning WIP Units * Completion %) + Current Period Production Units + (Ending WIP Units * Completion %) - (Beginning WIP Units * Completion %)= (20,000 * 0.6) + 300,000 + (10,000 * 0.35) - (20,000 * 0.6)= 12,000 + 300,000 + 3,500 - 12,000= 303,5003. Cost per Equivalent Unit = Total Costs / Equivalent Units = $1,881,000 / 303,500 = $6.20However, since $6.20 is not an option and there seems to be a mistake in the calculation process, let's correct the calculation:Correct Equivalent Units calculation without subtracting the beginning WIP units again (since they are already accounted for in the total units and their state of completion only matters for the portion being completed this period):= 12,000 (from the 40% work needed to complete the beginning WIP) + 300,000 + 3,500 = 315,500Correct Cost per Equivalent Unit = $1,881,000 / 315,500 = $5.96Given the options and the mistake in the initial calculation, the correct approach is to calculate the equivalent units correctly, which seems to have been misunderstood in the explanation. The correct calculation should directly consider the total costs and the equivalent units of production, including both the work done on beginning inventory to completion and the work done on current period production and ending inventory. However, without the exact correct calculation aligning with the provided options, the closest approximation based on the given options and understanding the mistake would be to select the option that would typically represent a correct methodology for calculating cost per equivalent unit, which is not directly represented in the provided calculation. Therefore, the explanation aimed to correct the calculation process, but please note the final answer should be recalculated based on the correct formula:Cost per Equivalent Unit = Total Costs / Equivalent UnitsWithout the exact numbers aligning to the options, the explanation sought to demonstrate a typical calculation error and correction approach. The correct answer should be recalculated accurately with the given data.

Bost Products Inc -If Bost Uses the Weighted-Average Method of Computing Equivalent Units