Giga Company uses a weighted average process cost system. The department started and finished 129,000 units during the current period. The ending inventory consists of 60,000 units that are 75% complete with respect to direct labor and overhead. All direct materials are added at the beginning of the process. The department incurred direct labor costs of $262,500 and overhead costs of $126,000.(a) Compute the equivalent cost per unit for direct labor.(b) Compute the equivalent cost per unit for overhead.
What will be an ideal response?
| ? | Physical Units | Percent Added | Equivalent Units |
| Units started and completed………… | 129,000 | 100 | 129,000 |
| Ending Work in Process…………… | 60,000 | 75 | 45,000 |
| Total units…………………………… | 189,000 | ? | 174,000 |
| (b) | Overhead cost per equiv. unit | = $126,000/174,000 equivalent units |
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