Answer:
Unit cost of material = $0.6
Unit cost of Conversion = $2.5
Explanation:
The question requires the computation of Cost of materials and Conversion Costs for the month of June in Hollins Company
Step 1: First important information,
Equivalent units for material is 20,000 and the conversion cost is 19,000
As such we answer as follows:
Material $12,000
Conversion:
Labour Cost $29,500
Overhead Cost $18,000 $47,500
Step 2: We determine the Equivalent cost per unit for both material and Conversion costs
Material:
Net cost $12,000
Equivalent Units of Production 20,000
The Equivalent unit cost per unit = $12,000/ 20,000 = $0.6
Conversion:
Net cost $47,500
Equivalent Units of Production 19,000
The Equivalent unit cost per unit = $47,500/ 19,000= $2.5
