Eagles Ltd. uses process costing in its Fabricating Department. At the beginning of
October, it had 12,000 units in beginning work-in-process that were 40% complete
with respect to conversion. During October, it put 87,000 units into production and
completed 89,000 good units. On October 31, there were 3,000 units in ending work-
in-process that were 70% complete with respect to conversion. Direct materials are
added at the beginning of the process. Inspection occurs at the end of the process,
and normal spoilage is 6% of good output.
Costs related to the beginning inventory were $36,800 for direct materials and
$28,600 for conversion costs. During the month, the company issued $280,000 of
direct materials and incurred $599,400 of conversion costs.
Assuming Eagles uses the weighted average method of process costing, the cost per
equivalent unit for direct materials and conversion costs, respectively, are
? ?. $3.20; $6.40
b. $3.44; $6.89