Huffer Company Uses the Weighted-Average Method in Its Process Costing

question 28

Multiple Choice

Huffer Company uses the weighted-average method in its process costing system.The following information pertains to Processing Department D for the month of May:
$$\begin{array} { | l | r | r | } \hline & \text { Number of units } & \text { Cost of materials } \\\hline \text { Beginnirg work in process } & 30,000 & \$ 11,000 \\\hline \text { Started in May } & 8 0 , 0 0 0 & \$ 36,000 \\\hline \text { Units completed } & 8 5 , 0 0 0 & \\\hline \text { Ending work in process } & 25,000 & \\\hline\end{array}$$
All materials are added at the beginning of the process.Which of the following costs is closest to the cost per equivalent unit for materials?

• A) $0.43.
• B) $0.45.
• C) $0.55.
• D) $0.59.

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Definitions:

Average Expenditure

Price paid per unit of a good.

Competitive Buyer

A buyer in a market who has no influence on the market price and must accept the market price as given.

Marginal Expenditure Curve

Curve describing the additional cost of purchasing one additional unit of a good.

Factor of Production

An economic resource that is used to produce goods and services, including land, labor, capital, and entrepreneurship.