Question

Apeto Company produces premium chocolate candy bars. Conversion costs are added uniformly. For February, EWIP is 40 percent complete with respect to conversion costs. Materials are added at the beginning of the process. The following information is provided for February: Physical flow schedule: Units to account for: Units in BWIP 0 Units started 70,000 Total units to account for 70,000 Units accounted for: Units completed: From BWIP 0 Started and completed 47,000 47,000 Units in EWIP 23,000 Total units accounted for 70,000 Inputs Direct Materials Conversion Costs $38,500 $61,820 Required: 1. Calculate the equivalent units for each input category. Equivalent Units Direct Materials Conversion 2. Calculate the unit cost for each category and in total. If required, round your answers to the nearest cent. Unit direct materials cost $ Unit conversion cost $ Total unit cost $ 3. What if a different type of materials is also added at the end of the process (a candy wrapper), costing $4,700

Answer 1

Answer:

1. Equivalent units

Direct materials = 70,000 units

Conversion Units = 47,000 + 23,000*40% = 47,000 + 9,200 = 56,200 units

2. Unit direct material cost = $38,500 / 70,000 = $0.55

   Unit conversion cost = $61,820 / 56,200 = $1.10

   Total unit cost = $0.55 + $1.10 = $1.65

3. New unit cost = $1.65 + ($4,700/47,000 units) = $1.65 + $0.1 = $1.75