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The Colorado Company manufactures a product that goes through three processing departments. Information relating to activity in the first department during June is given below.
Percentage Completed Units Materials ConversionWork in process, June 1 80,000 65% 45%Work in process, Jun 30 65,000 75% 65%
The department started 325,000 units into production during the month and transferred 340,000 completed units to the next department.
Required: Compute the equivalent units of production for the first department for June, assuming that the company uses the weighted-average method of accounting for units and costs.
Evaluate the reasons for the selection of the cost drivers in the discussion above and the potential impact the cost drivers will have on accurately reflecting costs and overall performance of the business.
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