Answer:
Direct material cost per equivalent unit = $3.77
Explanation:
<em>Under the weighted average method of valuation, to account for completed units, it is assumed that the entire degree of work required is done in the period under consideration. So there is no separation of the completed units into opening inventory and fully worked.</em>
Cost per equivalent unit = cost / total equivalent units
To determine the direct material cost per equivalent unit, we follow the steps below
Step 1
<em>Determine the total equivalent units</em>
<em>Item Workings Equivalent unit (E.U)</em>
Finished good 100% × 59,000 = 59,000
Closing WIP 50% × 15,000 = 7,500
Total equivalent unit 66,500
Step 2
<em>Determine the cost per equivalent unit</em>
Total direct material cost = $ (60,100 + 190,800)
= $ 250,900
Direct material cost per equivalent unit
= 250,900/66, 500 E.U
= $3.77
Direct material cost per equivalent unit = $3.77
