Question

The cost of energy consumed in producing good units in the Bottling Department of Mountain Springs Water Company was $36,850 for June and $39,060 for July. The number of equivalent units produced in June and July was 45,000 for June and 52,000 for July. Determine the energy cost per equivalent unit for(round your answer to two (2) decimal places, do not use a currency symbol, example 12.25):

Answer 1

Answer:

• June ⇒ $0.82 per equivalent unit
• July ⇒ $0.75 per equivalent unit

Explanation:

number of equivalent units:

• June 45,000 units
• July 52,000 units

energy cost:

• June $36,850
• July $39,060

energy cost per equivalent unit:

• June ⇒ month's energy cost / month's production of equivalent units = $36,850 / 45,000 units = $0.82 per equivalent unit
• July ⇒ month's energy cost / month's production of equivalent units = $39,060 / 52,000 units = $0.75 per equivalent unit