Nano Company Uses a Weighted Average Process Cost System

question 83

Essay

Nano Company uses a weighted average process cost system. The department started and finished 149,000 units during the current period. The ending inventory consists of 60,000 units that are 75% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $262,500 and overhead costs of $126,000.
(a) Compute the equivalent cost per unit for direct labor.
(b) Compute the equivalent cost per unit for overhead.

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Definitions:

Substitute Goods

Goods or services that serve as alternatives to each other, where a rise in the cost of one results in a higher demand for the other.

Complementary Goods

Products or services that are used together, where the increase in demand for one leads to an increase in demand for the other.

Natural Gas

A fossil fuel composed mostly of methane, used as a source of energy for heating, cooking, and electricity generation, as well as a feedstock for chemical manufacturing.

Complementary Goods

Goods or services that are frequently utilized in conjunction with each other, leading to a scenario where the desire for one boosts the desire for the other.