A company uses a process costing system and the weighted average method for inventory costs. The following information is available regarding direct labor for the current year:
(a) Calculate the equivalent units of production for direct labor for the year.
(b) Calculate the cost per equivalent unit for direct labor (round to the nearest cent).
Definitions:
Machine Hours
A measure of the time a machine is in operation, used in cost accounting to allocate machine costs to products.
Overhead Applied
The allocation of estimated overhead costs to specific jobs or production units during an accounting period.
Direct Labor Cost
The wages and related benefits of employees who are directly involved in the production of goods or services.
Manufacturing Overhead
All indirect costs associated with the production of goods, such as utilities and salaries for non-direct labor.
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