Simon Productions Company had a beginning work in process inventory totaling $7,200. During the current period, the company added materials costs of $15,680, labor cost of $13,500 and overhead of $20,100. Equivalent production was 12,000 units, and 9,000 units were completed and transferred to the finished goods inventory. Inventory costs would be determined using a unit cost (rounded to two decimal places)of

Question

Quizplus · Accepted Answer

First, we need to calculate the total cost incurred during the period by adding all the costs:

Total cost = Beginning WIP inventory + Material costs + Labor costs + Overhead costs
Total cost = $7,200 + $15,680 + $13,500 + $20,100
Total cost = $56,480

Next, we need to calculate the cost per equivalent unit by dividing the total cost by the equivalent units produced:

Cost per equivalent unit = Total cost / Equivalent units produced
Cost per equivalent unit = $56,480 / 12,000
Cost per equivalent unit = $4.71

Therefore, the unit cost, rounded to two decimal places, is $4.71.

Simon Productions Company Had a Beginning Work in Process Inventory