A business makes one product that passes through a single process.

This business uses weighted average costing. The details of the process for the last period are as follows;

Materials.................................$98,000

Labour ....................................$60,000

Production overheads..............$39,000

Units added to the process.....1000

There were 200 units of opening WIP which are valued as follows;

Materials................................$22,000

Labour ...................................$ 6,960

Production overheads............$3,000

There were 300 units of closing WIP fully completed as to materials but only 60% complete for labour and 50% complete for overheads. There were no process losses.

Required:

(a) Calculate the cost to be assigned to completed output for the period

(b) Why is it necessary to calculate equivalent units?