Problem - Badgersize Company has the following information for its Forming Department for the month of August:
Work in Process Inventory, August 1: 20,000 units
Direct materials: 100% complete $ 80,000
Conversion: 20% complete 24,000
Balance in work in process, August 1 $ 104,000
Units started during August 47,000
Units completed and transferred in August 59,000
Work in process (70% complete), August 31 ?
Costs charged to Work in Process in August
Direct materials $ 137,000
Conversion costs:
Direct labor $ 118,000
Overhead applied 136,000
Total conversion $ 254,000
Assume materials are added at the start of processing.
a. Calculate the equivalent units for the Forming Department for the month of August.
b. Find the cost per equivalent unit of the transferred units.