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13 March, 11:43

Superior Micro Products uses the weighted-average method in its process costing system. Data for the Assembly Department for May appear below: Materials Labor Overhead Work in process, May 1 $ 36,900 $ 61,650 $ 299,715 Cost added during May $ 223,965 $ 41,100 $ 199,810 Equivalent units of production 3,100 3,000 2,900 Compute the cost per equivalent unit for materials, labor, overhead, and in total.

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  1. 13 March, 13:23
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    (a) cost per equivalent unit

    Item Material Labour Overheads

    Cost per EU ($) 84.15 34.25 172.25

    b) Total cost per equivalent = $290.65

    Explanation:

    The weighted average method of valuation of work in progress does not separate opening work-in progress from the newly introduced.

    The cost per equivalent units using this method is computed by dividing the total equivalent units by the cost element. This repeated for each of cost element categories.

    Item Material Labour Overheads

    Opening WIP 36,900 61,650 299,715

    Cost added 223,965 41,100 199,810

    Total cost ($) a 260,865 102,750 499,525

    Equivalent unit b 3,100 3,000 2,900

    Cost per EU ($) (a/b) 84.15 34.25 172.25

    Total cost per equivalent unit = 84.15 + 34.25 + 172.25

    Total cost per equivalent = $290.65
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