Will the method yield a valid estimate of incremental cost

Question

Bell Computers, Ltd., located in Liverpool, England, assembles a standardized personal computer from parts it purchases from various suppliers. The production process consists of several steps, starting with assembly of the "mother" circuit board, which contains the central processing unit. This assembly takes place in the CPU Assembly Department. The company recently hired a new accountant who prepared the following report for the department for May using the weighted-average method:

Units to be accounted for:
Work in process, May 1: materials 90%          complete; conversion 80% complete	12,700
Started into production	31,600
Total units	44,300
Units accounted for as follows:
Transferred to next department	40,300
Work in process, May 31: materials 75%          complete; conversion 50% complete	4,000
Total units	44,300

Cost Reconciliation
Cost to be accounted for:
Work in process, May 1	£	45,339
Cost added in the department		125,838
Total cost to be accounted for	£	171,177
Cost accounted for as follows:
Work in process, May 31	£	10,380
Transferred to next department		160,797
Total cost accounted for	£	171,177

The company's management would like some additional information about May's operation in the CPU Assembly Department. (The currency in England is the pound, which is denoted by the symbol £.)

Required:

1.	How many units were started and completed during May?

Units started and completed during May

2.	What were the equivalent units of production for May for materials and conversion costs?

	Materials	Conversion
Equivalent units of production

3.	What were the costs per equivalent unit for May? The following additional data are available concerning the department's costs (Round your answers to 2 decimal places):

	Materials		Conversion		Total
Work in process, May 1	£	27,940	£	17,399	£	45,339
Costs added during May	£	75,980	£	49,858	£	125,838

	Materials	Conversion
Cost per equivalent unit	£	£

4.	Calculate the material cost and the conversion cost of the ending work in process. (Round your cost per equivalent unit calculation to 2 decimal places and final answers to the nearest whole dollar amount.)

	Materials	Conversion	Total
Ending work in process inventory:
Equivalent units of production
Cost per equivalent unit	£	£
Cost of ending work in process inventory	£	£	£

5.	The new manager of the CPU Assembly Department was asked to estimate the incremental cost of processing an additional 1,000 units through the department. He took the unit cost for an equivalent whole unit you computed in (3) above and multiplied this figure by 1,000. Will this method yield a valid estimate of incremental cost?
	Yes No