Outose Concept manufactures small tables in its Processing Department

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Outose Concept manufactures small tables in its Processing Department. Direct materials are added at the initiation of the production cycle and must be bundled in single kits for each unit. Conversion costs are incurred evenly throughout the production cycle. Before inspection, some units are spoiled due to nondetectible materials defects. Inspection occurs when units are 50% converted. Spoiled units generally constitute 5% of the good units. Data for December 2015 are as follows:

WIP, beginning inventory 12/1/2015 23,000 units

Direct materials (100% complete)

conversion costs (45% complete)

Started in December 76,500 units

Completed and transferred out 12/31/2015 72,100 units

WIP, ending inventory 12/31/2015 19,000 units

Direct materials (100% complete)

Conversion costs (65% complete)

Costs for December:

WIP, beginning inventory:

Direct materials $157,650

Conversion costs 76,900

Direct materials added 230,400

Conversion costs added 292,000

What is the total cost per equivalent unit using the weighted-average method of process costing?

		$6.85
		$7.15
		$8.75
		$7.85