A Company Uses a Process Cost Accounting System and the Weighted

question 21

Essay

A company uses a process cost accounting system and the weighted average method for inventory costs.The following information is available regarding direct labor for the current year:
Goods in process,January 1 5,500 units,80% complete
Goods in process,December 31 8,800 units,40% complete
Units completed and transferred to
finished goods 46,900 units
Direct labor costs during the year $266,300
(a)Calculate the equivalent units of production for direct labor for the year.
(b)Calculate the average cost per equivalent unit for direct labor (round to the nearest cent).

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Definitions:

Mean

The average of a set of numbers, calculated by adding all the numbers in a set together and then dividing by the count of those numbers.

Standard Deviation

A calculation that determines the extent of variability or dispersion in a series of values.

Normal Distribution

Normal distribution, also known as Gaussian distribution, is a continuous probability distribution that is symmetrical around the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.

50th Percentile

Also known as the median, it is the value below which 50% of the data points in a data set lie.