Question

Colil Computer​ Systems, Inc., manufactures printer circuit cards. All direct materials are added at the inception of the production process. During​ January, the accounting department noted that there was no beginning inventory. Direct materials of $ 307 comma 000 were used during the month. Workminusinminusprocess records revealed that 12 comma 000 card units were started in​ January, 6 comma 000 card units were​ complete, and 4 comma 600 card units were spoiled as expected. Ending workminusinminusprocess card units are complete in respect to direct materials costs. Spoilage is not detected until the process is complete. What is the direct material cost per equivalent​ unit?

Answer 1

Answer:

$25.83 equivalent unit cost (materials)

Explanation:

12,000

(6,000) completed

(4,600) spolied

1,400 ending WIP inventory

Equivalent units:

12,000 units as the spoiled units are between the expected amount therefore not a loss. If ther ewere a higher amount then, our equivalent untis will exclude the additional spoilage and directly declare them as period cost.

307,000 materials cost / 12,000 equivalent units = $25.83