Thomas Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the Refining Department had 2000 gallons of partially processed product in production.During January,36,000 gallons were transferred in from the Mixing Department,and 31,000 gallons were completed and transferred out.At the end of the month,there were 7000 gallons of partially processed product remaining in the Refining Department.See additional details below. Refining Department,beginning balance at January 1
$$\begin{array} { l l }
\text { Quantity: } & 2000 \text { units (partially processed) } \
\text { Cost: } & \$ 15,600 \text { of costs transfered in } \
& \$ 1600 \text { of materials cost } \
& \
&& \$ 4500 \text { of conversicon cost } \
&& \$ 21,70 0 \text { total account balance }
\end{array}$$ Costs added during January
$\begin{array}{ll}
\text { Cost of units transferred in } & \$ 222,400 \
\text { Direct materials cost } & \$ 46,000 \
\text { Conversion cost } & \$ 93,750
\end{array}$
Refining Department,ending balance at January 31
Quantity: $ \quad 7000 $ units (partially processed)
Percent complete for materials cost: $ \quad 85 \% $
Percent complete for conversion cost: $ \quad 70 \% $
What was the cost per equivalent unit with respect to direct materials costs for the Refining Department in the month of January? Use the weighted-average method.(Round your calculations to the nearest cent.)

Question

Thomas Manufacturing produces a chemical pesticide and uses process costing.There are three processing departments-Mixing,Refining,and Packaging.On January 1,the Refining Department had 2000 gallons of partially processed product in production.During January,36,000 gallons were transferred in from the Mixing Department,and 31,000 gallons were completed and transferred out.At the end of the month,there were 7000 gallons of partially processed product remaining in the Refining Department.See additional details below. Refining Department,beginning balance at January 1
$$\begin{array} { l l } 
\text { Quantity: } & 2000 \text { units (partially processed) } \
\text { Cost: } & \$ 15,600 \text { of costs transfered in } \
& \$ 1600 \text { of materials cost } \
& \
&& \$ 4500 \text { of conversicon cost } \
&& \$ 21,70 0 \text { total account balance }
\end{array}$$ Costs added during January
$\begin{array}{ll}
\text { Cost of units transferred in } & \$ 222,400 \
\text { Direct materials cost } & \$ 46,000 \
\text { Conversion cost } & \$ 93,750
\end{array}$
 Refining Department,ending balance at January 31
Quantity: $ \quad 7000 $ units (partially processed)
Percent complete for materials cost: $ \quad 85 \% $
Percent complete for conversion cost: $ \quad 70 \% $
 What was the cost per equivalent unit with respect to direct materials costs for the Refining Department in the month of January? Use the weighted-average method.(Round your calculations to the nearest cent.)

Quizplus · Accepted Answer

The cost per equivalent unit with respect to direct materials costs for the Refining Department in the month of January using the weighted-average method is $1.29. This is calculated by dividing the total direct materials costs added during the month ($46,000) by the total equivalent units of production for the month. The total equivalent units of production is calculated by adding the equivalent units of production for the beginning work in process (2,000 units x 100% complete for materials cost = 2,000 equivalent units) to the equivalent units of production for the units started and completed during the month (31,000 units x 100% complete for materials cost = 31,000 equivalent units) to the equivalent units of production for the ending work in process (7,000 units x 85% complete for materials cost = 5,950 equivalent units). This gives a total of 38,950 equivalent units of production for the month. Dividing the total direct materials costs added during the month ($46,000) by the total equivalent units of production for the month (38,950 equivalent units) gives a cost per equivalent unit with respect to direct materials costs of $1.29.

Thomas Manufacturing Produces a Chemical Pesticide and Uses Process Costing