Question

Company uses the​ weighted-average method in its process costing system. The Packaging Department started the month with 290 units in​ process, started 1 comma 460 ​units, and had 120 units in process at the end of the period. All materials are added at the beginning of the​ process, and conversion costs are incurred uniformly. The units in process at the end of the month are 40​% complete with respect to conversion costs. The department incurred the following​ costs: Beginning WIP Added this month TotalDirect Materials $700 $3,400 $4,100Conversion Costs 300 6,150 6,450Total $1,000 $9,550 $10,550The cost per equivalent unit for direct materials is ?A. $2.56B. $7.30C. $5.93D. $2.30

Answer 1

Answer:

D) $2.30

Explanation:

since all materials are added at the beginning of the process, all units will be 100% complete relative to direct materials

equivalent units of production for direct materials = number of units in beginning work in process + units started during the month = 290 + 1,460 = 1,750

cost per equivalent unit for direct materials = total direct material cost / EUP for direct materials = $4,100 / 1,750 EUP = $2.34 . The closest option is $2.30.