# Exercise 5: Equivalent units, cost per equivalent unit – weighted average method

The Fedex Company produces a car care product known as Shine-9 which is a high quality vehicle cleaning liquid. The processing of Shine-9 is completed through three separate departments. The following data pertains to the company’s first processing department:

The information about the cost in work in process beginning inventory and the total cost added during the month of May is given below:

Work in process inventory on May 1:

• Materials: \$192,500
• Conversion cost: \$107,250

Required:

1. Determine the missing figures in the above schedule
(Hint: Compute equivalent units of production for May for the first department).
2. Compute cost per equivalent unit for May for the first department of Fedex Company.

## Solution

### 1. Missing figures (i.e., equivalent units of production):

Units transferred to next department are considered 100% complete with respect to materials and conversion cost. The equivalent units in ending work in process inventory have been determined as follows:

Equivalents units in work in process ending inventory:
Materials: 20,000 units × 50% = 10,000 units
Conversion: 20,000 units × 25% = 5,000 units

### 2. Cost per equivalent unit:

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One Comment on Exercise 5: Equivalent units, cost per equivalent unit – weighted average method
1. Love Jules

is there any problem that consists of 2 period using Weighted Average?