A Company Uses a Process Cost Accounting System (A) Calculate the Equivalent Units of Production for Direct Labor

question 133

Essay

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

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Definitions:

Life Tenant

An individual who has the right to use and benefit from property during their lifetime, after which the property passes to another designated party.

Reduce Its Value

An action or event that decreases the worth of something, affecting its marketability or usefulness.

Future Interest

An interest in real or personal property that will begin at a future date through a legal arrangement, such as a will or trust.

Earnest Money

A deposit made by a buyer to demonstrate commitment to a purchase agreement, often used in real estate transactions.