Garcia Inc. manufactures products that pass through two or more processes. During April, equivalent units were computed using the weighted average method:

Required:
1. Calculate the unit cost for April using the weighted average method.
2. Using the weighted average method, determine the cost of EWIP and the cost of the goods transferred out.
3. Garcia had just finished implementing a series of measures designed to reduce the unit cost to $1.60 and was assured that this had been achieved and should be realized for June's production; yet upon seeing the unit cost for June, the president of the company was disappointed. Can you explain why the full effect of the cost reductions may not show up in June? What can you suggest to overcome this problem?

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18,000 Units completed Units in EWIP x Percentage complete (12,000 x 60 percent) Equivalent units of output April's costs to account for are as follows: BWIP (40 percent complete) Materials Conversion cost Total 7,200 25,200 $ 3,360 30,000 12,000 $45,360